In Bertrand Competition with Differentiated Goods, the Demand Curve for Bags

question 17

Multiple Choice

In Bertrand competition with differentiated goods, the demand curve for bags of Wilson tennis balls is q_W = 80 - 4P_W + 2P_D , and the demand curve for bags of Dunlop tennis balls is q_D = 80 - 2P_D + P_W. The two firms both have zero marginal costs. How many bags of tennis balls does each firm produce?

• A) q_W = 44; q_D = 44
• B) q_W = 64; q_D = 48
• C) q_W = 16; q_D = 24
• D) q_W = 38; q_D = 32

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