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Let Firm a Face Demand Curve QA = 100 -

Question 7

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Let firm A face demand curve QA = 100 - PA + .5PB and firm B face demand curve QB = 100 - PB + .5PA.Products A and B both have constant marginal cost of production of 10 per unit (and no fixed cost) .Each firm acts as a Bertrand competitor.What is the equation of firm B's (price) reaction function?


A) Let firm A face demand curve Q<sub>A</sub> = 100 - P<sub>A</sub> + .5P<sub>B </sub>and firm B face demand curve Q<sub>B</sub> = 100 - P<sub>B</sub> + .5P<sub>A</sub>.Products A and B both have constant marginal cost of production of 10 per unit (and no fixed cost) .Each firm acts as a Bertrand competitor.What is the equation of firm B's (price) reaction function? A) B) C) D)
B) Let firm A face demand curve Q<sub>A</sub> = 100 - P<sub>A</sub> + .5P<sub>B </sub>and firm B face demand curve Q<sub>B</sub> = 100 - P<sub>B</sub> + .5P<sub>A</sub>.Products A and B both have constant marginal cost of production of 10 per unit (and no fixed cost) .Each firm acts as a Bertrand competitor.What is the equation of firm B's (price) reaction function? A) B) C) D)
C) Let firm A face demand curve Q<sub>A</sub> = 100 - P<sub>A</sub> + .5P<sub>B </sub>and firm B face demand curve Q<sub>B</sub> = 100 - P<sub>B</sub> + .5P<sub>A</sub>.Products A and B both have constant marginal cost of production of 10 per unit (and no fixed cost) .Each firm acts as a Bertrand competitor.What is the equation of firm B's (price) reaction function? A) B) C) D)
D) Let firm A face demand curve Q<sub>A</sub> = 100 - P<sub>A</sub> + .5P<sub>B </sub>and firm B face demand curve Q<sub>B</sub> = 100 - P<sub>B</sub> + .5P<sub>A</sub>.Products A and B both have constant marginal cost of production of 10 per unit (and no fixed cost) .Each firm acts as a Bertrand competitor.What is the equation of firm B's (price) reaction function? A) B) C) D)

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