Question

There are three firms (1, 2, and 3) in a market, where each firm chooses its own price and the products the firms produce are similar but differentiated from each other. The quantity demanded for each firm i is equal to 28 – pi + ½(pj + pk), where pi is the firm's own price and pj and pk are the prices of the other two firms. The firms face no costs.

If the firms make their pricing decisions simultaneously, what is the symmetric Nash equilibrium price?

Answer 1

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answered by: anonymous