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Both times there's a demand curve out there.
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In one model we thought of the firms setting quantities
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and the market determining prices,
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and here we have the firms setting prices
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and the market determining quantities,
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but the basic underlying economic structure of this is very,
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very similar.
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So to find the Nash Equilibrium
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we're going to have to find best responses.
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So what we're going to do together is to figure out
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what these best responses look like and let's try and do that.
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So I want to figure out the best response of Firm 1