Suppose that Etsy (an e-commerce site focused on handmade or vintage items) necklace vendors compete in a Bertrand market structure with differentiated products. Demand for style 1, produced by vendor 1, is given by where p₁ is price of style 1 and p₂ is the price of style 2, produced by vendor 2. Demand for style 2 is
The costs of providing these necklaces are C₁ = q₁ and C₂ = 0.75q₂ respectively. The equilibrium price for style 1 is $____.

Question

Suppose that Etsy (an e-commerce site focused on handmade or vintage items) necklace vendors compete in a Bertrand market structure with differentiated products. Demand for style 1, produced by vendor 1, is given by

where p₁ is price of style 1 and p₂ is the price of style 2, produced by vendor 2. Demand for style 2 is

The costs of providing these necklaces are C₁ = q₁ and C₂ = 0.75q₂ respectively. The equilibrium price for style 1 is $____.

Quizplus · Accepted Answer

The Answer of Suppose that Etsy (an e-commerce site focused on handmade or vintage items) necklace vendors compete in a Bertrand market structure with differentiated products. Demand for style 1, produced by vendor 1, is given by where p₁ is price of style 1 and p₂ is the price of style 2, produced by vendor 2. Demand for style 2 is The costs of providing these necklaces are C₁ = q₁ and C₂ = 0.75q₂ respectively. The equilibrium price for style 1 is $____.

Suppose That Etsy (An E-Commerce Site Focused on Handmade or Vintage