Two firms sell an homogeneous product

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Suppose two firms sell an homogeneous product; they compete in prices. Their respective marginal costs are MC1(q) = 10 and MC2(q) = 20. Find the prices that form equilibrium (for simplicity and reality, assume that prices are quoted in units no smaller than cents). Derive the best response functions and plot them carefully.

Reference no: EM13860043

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