1 Two firms are Bertrand duopolists Firm 1 has total costs.pdf

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1. Two firms are Bertrand duopolists. Firm 1 has total costs c(q)=2q. Firm 2 has total costs c(q)=4q . The demand for their product is Q=40p, where Q is the total quantity demanded. What price will each firm charge in equilibrium? (Prices can only be set to the nearest cent.) (a) p1=1.99 and p2= 2 (b) p1=3.99 and p2=4 (c) p1=2 and p2=4 (d) p1=1 and p2=2.

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