Question

    Two duopolist firms, 1 and 2, sell a homogeneous good in a market with the demand function Q=100−2P, where Q is the quantity demanded at price P. Firms 1 and 2 have constant marginal costs of 0 and 30, respectively. The firms simultaneously announce prices, and consumers buy from the firm whose price is lower. If the firms choose the same price, all the consumers buy from firm 1.

    Firm 1's equilibrium price is:

    A 30 Correct Answer Incorrect Answer
    C 25 Correct Answer Incorrect Answer
    D 29.99 Correct Answer Incorrect Answer

    Solution

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