Find bertrand-nash equilibrium price and profit of each firm

Reference no: EM13698308

Two firms produce the same product and face a market demand described by Q = 1,000 -20p. Firm 1 has a unit cost of production equal to $10 whereas firm 2 have a higher unit cost of production equal to $20.

a- Find the Bertrand-Nash equilibrium price and profit of each firm.

b- Is this outcome efficient?

c- Suppose firm 2’s marginal cost increases to $40 and firm 1’s cost remains unchanged. What is the Bertrand-Nash equilibrium outcome?

Reference no: EM13698308

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