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Market demand is q = 100-p. Two firms, with capacities k1=k2=20. Both have zero unit costs of production and they set the price simultaneously. If firm 2 charges Nash equilibrium price but firm 1 charges 80. Then how much demand is satisfied by firm 2?
a) 10
b) 20
c) 40
d) 15
also Derive the Nash equilibrium of this game.
a) p1* = p2* = $40
b) p1* = p2* = $60
c) p1* = p2* = $20
d) p1* = p2* = $10
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