Suppose the demand for Pepsi is q_p = 50 - 2p_p + 1p_c.The firm faces a constant marginal cost of m,and
denotes the price of Coke.Assuming Bertrand behavior,derive Pepsi's best-response function and explain how the firm changes price in response to changes in its own marginal cost and changes in Coke's price.

Question

Suppose the demand for Pepsi is q_p = 50 - 2p_p + 1p_c.The firm faces a constant marginal cost of m,and

Suppose the demand for Pepsi is q<sub>p</sub> = 50 - 2p<sub>p</sub> + 1p<sub>c</sub>.The firm faces a constant marginal cost of m,and denotes the price of Coke.Assuming Bertrand behavior,derive Pepsi's best-response function and explain how the firm changes price in response to changes in its own marginal cost and changes in Coke's price.

denotes the price of Coke.Assuming Bertrand behavior,derive Pepsi's best-response function and explain how the firm changes price in response to changes in its own marginal cost and changes in Coke's price.

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The Answer of Suppose the demand for Pepsi is q_p = 50 - 2p_p + 1p_c.The firm faces a constant marginal cost of m,and denotes the price of Coke.Assuming Bertrand behavior,derive Pepsi's best-response function and explain how the firm changes price in response to changes in its own marginal cost and changes in Coke's price.

Suppose the Demand for Pepsi Is Qp = 50 -

Suppose the Demand for Pepsi Is Q_p = 50 -