5.3 Assume that Miller and Inbev each sells a type of beer. Beer is a differentiated product and demand is given by:
QM=90-2pM +pI
QI =90-2pI+pM.
Assume MC=0 for both firms.
a) What are equilibrium prices if they compete by setting prices in Bertrand fashion?
I got P = 18 by this calculations:
http://imgur.com/a/XuCDS
My friend gets P = 30.
He's dead sure his calculations are correct and my incorrect.
Anyone want to confirm which one is right?