What are the equilibrium prices in terms of k-one

Reference no: EM133614610

Problem: In the market for electric cars, firm 1 is a pioneer who invests k1 in R&D for efficient production. Firm 1's total production cost is given by C1(q1) = (10-k1)q1 +k2 1 . The demand for firm 1's electric cars is given by q1 = 20 - 2p1 + p2. On the other hand, firm 2 is a latecomer whose total production cost is given by C2(q2) = 10q2. The demand for firm 2's electric cars is given by q2 = 20 - 2p2 + p1. Assume the two firms compete by setting prices after firm 1 invests k1. 1.1. What are the equilibrium prices, (p1, p2), in terms of k1?

Reference no: EM133614610

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