Two Portrait Painters Compete in a Bertrand Market Structure with Differentiated

question 59

Essay

Two portrait painters compete in a Bertrand market structure with differentiated products. The demand curve for the first is given by where p_F is the price for a portrait from the first and p_S is the price from the second. The demand curve for the second painter's portraits is given by The two painters' cost functions are C_F = q_F and C_S = q_S respectively. Use calculus for the following:
a. Identify the first painter's profit function and its reaction function.
b. Identify the second painter's profit function and its reaction function.
c. Identify the equilibrium prices charged for portraits by the two painter.

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Definitions:

Shoulder

The region where the arm connects to the torso, encompassing various muscles, joints, and bones.

Joint

A structure in the human or animal body where two parts of the skeleton are fitted together.

Humerus

The long bone in the upper arm or forelimb, extending from the shoulder to the elbow.

Extensor Carpi Ulnaris

A muscle of the forearm that extends and adducts the wrist.