Q(p)=max{1 − p, 0}. Suppose each firm has zero marginal cost, but with fixed "start-up" costs, k>0 (only if it has posit

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Q(p)=max{1 − p, 0}.
Suppose each firm has zero marginal cost, but with fixed
"start-up" costs, k>0
(only if it has positive production does it incur the cost k). The
goods produced are substitutes
perfect and assume the same criteria seen in class associated with
the choice by the consumer
in the case of facing an offer with identical prices.
i. Model the game strategically
ii. If k =0.1:
a. Show that pi=0.1 is a strictly dominated action for the
player
i=1,2.
iii. Find the Nash equilibria(s) and analyze