Consider Two Firms Engaged in Bertrand Competition with Differentiated Goods

Multiple Choice

Consider two firms engaged in Bertrand competition with differentiated goods and zero marginal costs.
Firm A's demand curve: q_A = 120 - 3P_A + 2P_B
Firm B's demand curve: q_B = 120 - 3P_B + 2P_A
In a Nash equilibrium, what is each firm's price?

A) P_A = $5; P_B = $5
B) P_A = $10; P_B = $10
C) P_A = $30; P_B = $30
D) P_A = $20; P_B = $20