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Question
Duopolists A and B face the following demand curves: QA = 100 - 2PA + 2PB and QB = 100 - 2PB + 2PA. If both firms have zero marginal cost, what are the profit-maximizing prices and quantities?
a. PA = 100, QA = 60, PB = 80, QB = 140.
b. PA = 25, QA = 100, PB = 25, QB = 100.
c. PA = 50, QA = 80, PB = 40, QB = 120.
d. PA = 50, QA = 100, PB = 50, QB = 100.
e. PA = 60, QA = 60, PB = 40, QB = 140.
Answer
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