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Problem: P* = MC/1+E
P + P/E = MC
P - MC = -P/E
(P - MC)/P = -1/E
Coke and Pepsi - Bertrand with differentiation model
Profit = (Price - Cost)Q For cost use Marginal Cost, for Price use Pc or Pp as applicable, and for Q:
Qc = 63.42 - 3.98Pc + 2.25Pp
Qp = 49.52 - 5.48Pp + 1.4Pc
MCc = 4.96, MCp = 3.96
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