Suppose the demand for Pepsi-Cola is qp = 54 - 2pp + 1pc.The demand for Coca-Cola is
qc = 54 - 2pc + 1pp.Each firm faces a constant marginal cost of zero.Determine the Bertrand equilibrium prices.What happens to the Bertrand equilibrium prices and profits if increased differentiation causes the demand for Pepsi-Cola to become qp = 104 - 2pp + 1pc while the demand for Coca-Cola remains unchanged?
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