Find the equilibrium price-quantities and profits

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Consider two Bertrand competitors in the market for brie, Franc ¸ois and Babette. The cheeses of Fran ¸cois and Babette are differentiated, with the demand for Fran ¸cois’ cheese given by qF = 30 − pF + pB , where qF is the quantity Fran ¸cois sells, pF is the price Fran ¸cois charges, and pB is the price charged by Babette. The demand for Babette’s cheese is similarly given as qB = 30 − pB + pF . Find the equilibrium price, quantities, and profits for Fran ¸cois and Babette. (Assume the marginal cost for both is zero.)

Reference no: EM131097377

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