Assume two firms sell differentiated products and face the


Assume two firms sell differentiated products and face the following demand curves:

q1 = 15 – p1 + 0.5p2

q2 = 15 – p2 + 0.5p1

Derive the best response function for each firm. Find the equilibrium set of prices in this market.

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Business Economics: Assume two firms sell differentiated products and face the
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