3-2-Assume a market with two firms selling two products. The demand of Firm 1 is Q1=7-3p1+3p2. The demand of Firm 2 is Q2=7-3p2+3p1. Assume all zero marginal and fixed costs. What is the reaction function of Firm 1? What is the reaction function of Firm 2? What is the equilibrium price of Firm 1? What is the equilibrium price of Firm 2? 30pts

3-2-Assume a market with two firms selling two products. The demand of Firm 1 is Q1=7-3p1+3p2. The demand of Firm 2 is Q2=7-3p2+3p1. Assume all zero marginal and fixed costs. What is the reaction function of Firm 1? What is the reaction function of Firm 2? What is the equilibrium price of Firm 1? What is the equilibrium price of Firm 2? 30pts

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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