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Two rms face the following demand curves for their products Q1 = 1003P1 +2P2 Q2 = 1003P2 +2P1 They incur a constant marginal cost equal to $20 and no...

Two firms face the following demand curves for their products

Q1 = 100−3P1 +2P2

Q2 = 100−3P2 +2P1

They incur a constant marginal cost equal to $20 and no fixed costs. The firms play a sequential Bertrand game: firm 1 chooses a price P1 and firm 2 having observed P1 chooses P2. a (18). Calculate the profit maximizing price and quantity for each firm.

b (2). Calculate the implied profit for each firm.

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