Please answer fast I'll rate you sure. 2. Bertrand (price) competition. Company A and B both produce widgets,at price PA and PB respectively. We suppose that the quantities q4 and qвsold are given byQA = 80-2PA + PB, B = 60 +3PA - PB -The production and distribution costs are 20 for company A and 10 for com-pany B. Then we have profitsprofitA=qA(PA-cost A)profitBqB(PB- cost B)(i) Assuming that each company tries to maximise profits separately,find the equilibrium prices PA and PB.(ii) Find the quantities sold by each company, and the profits for eachcompany.

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Answered: (i) Assuming that each company tries to…

(i) Assuming that each company tries to maximise profits separately, find the equilibrium prices PA and PB. (ii) Find the quantities sold by each company, and the profits for each company.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.3P

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