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Consider a market with two firms, A and B, producing a differentiated product. The demand for...

Consider a market with two firms, A and B, producing a differentiated product. The demand for the products of firms A and B are, respectively, QA = 60 – 2pA + pB and QB = 60 – 2pB + pA, where pA is the price of firm A and pB is the price of firm B. Each firm has a constant marginal cost of production which is equal to 30 and no fixed costs. The firms choose prices only once and do so simultaneously.

(i) Compute the Nash equilibrium prices and profits.

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