Find the nash equilibrium in prices

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Duopolists each have total cost 500Qi, i = 1,2, and produce a differentiated product with demand functions: Q1 = 2000-2P1+ P2 and Q2 = 2000-2P2+P1. (The demand functions assume prices are such that demand is positive. If a negative quantity were implied, then that means 0 demand.) Find the Nash equilibrium in prices assuming the duopolists set their prices just once and simultaneously.

Calculate profits for each. Would the duopolists do better if they were to collude and do so successfully? (You do not have to do any calculations to confirm your answer to the latter part, just say 'yes' or 'no.')

How much could the firms make if they colluded successfully and what price(s) would they charge?

Reference no: EM133128703

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