Determine what are the equilibrium prices

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Question: Consider a homogeneous duopoly market where two firms compete in prices (Bertrand). De- mand is given by D(P) = 16-2P. There are no variable production costs.

a. If the capacity of each firm is 16 units, what are the equilibrium prices?

b. If the capacity of each firm iS 4 units, what are the equilibrum prices!

c. Show there is no equilibrium when the capacity of each firm is 6.

Reference no: EM132197988

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