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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