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SOLVED: Consider the following one-shot Bertrand game. Two identical firms produce an identical product at zero cost. The aggregate market demand curve is given by 6 - p, where p is the price facing the consumers. The two firms simultaneously choose prices once. Suppose further that the firm that charges the lower price gets the entire market and if both charge the same price they share the market equally. Assume that prices can only be quoted in integer units (only prices of 0, 1, 2, ... are al
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