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Q.2 Two firms (i- 1, 2) produce differentiated produets. The market-clearing price is given by: pl60-lj, where is the quantity chosen by firm i and qj the quantity chosen simultaneously by its competitor. The cost function of each firm is C,(a)-10q Q.2.a Find the response functions and show the response functions graphically. Q.2.b Identify the Nash equilibrium. Q.2.c Calculate each firms equilibrium profit.

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(Demand f TR: 63-1 #4; 2 31i 6mn seachm 25 5025025 a : 33-33 26-6オー279.84 7; ス 33-33 (16-62) 555,61

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