Re: DSE 2010
Posted by Amit Goyal on Jun 24, 2011; 3:56pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2010-tp6511483p6512534.html
Rahul this how you are going to put entries in the game box:
For example p1 = 3 and p2 = 2, then firm 2 will get the entire market so profit of firm 1 will be 0 and firm 2 will be TR-TC = pq-cq= 2(5-2) - 1.5(5-2)= 6-4.5=1.5.
Just do this exercise and compute all entries, in particular, for prices between 1 and 4 and then solve for Nash equilibrium.