Consider two firms engaged in Bertrand competition with differentiated goods and zero marginal costs.
Firm A's demand curve: qA = 120 - 3PA + 2PB
Firm B's demand curve: qB = 120 - 3PB + 2PA
In a Nash equilibrium, what is each firm's price?
A) PA = $5; PB = $5
B) PA = $10; PB = $10
C) PA = $30; PB = $30
D) PA = $20; PB = $20
Correct Answer:
Verified
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