6 Bertrand competitionModel 20■ Substutable&Heterogeneousgoods■price competition■ How to determine PÅ andPB?■ Akika: Massage machinewith Momikko■ Akika maxPA TA (PA, PB) =(a - PA + PB)(PAC) ⇒PA = (a + PB + C)/2■ Bika: Massage machine with■ Bika maxPB TB (PA, PB) =(a - PB + PA)(PB-C) ⇒PB = (a + PA+ C)/2acupuncture press■ Cost prices are the same cdemand function■ Game equilibrium:P₁ = P₁ = a + cBXA = aPA + PB,XB = a PB + PA-■ Solve Model 20 when Akika and Bika have different cost pricesCA and CB.

Introduction Here Akika is the massage machine with mommiko. And Bika is the massage machine with…

Bertrand competition Model 20 ■ Substutable&Heterogeneous goods ■How to determine PÅ and PB? ■ price competition ■ Akika maxPA TA(PA, PB) = (a - PA + PB)(PAC) ⇒ PA = (a + PB + C)/2 ■ Akika: Massage machine with Momikko ■ Bika: Massage machine with acupuncture press ■ Bika maxPB TB (PA, PB) = (a - PB + PA)(PB-C) ⇒ PB = (a + PA+ C)/2 ■ Cost prices are the same c demand function ■ Game equilibrium: P₁ = P₁ = a + c XA = aPA + PB, XB = a PB + PA - ■ Solve Model 20 when Akika and Bika have different cost prices CA and CB.

Bertrand competition Model 20 ■ Substutable&Heterogeneous goods ■How to determine PÅ and PB? ■ price competition ■ Akika maxPA TA(PA, PB) = (a - PA + PB)(PAC) ⇒ PA = (a + PB + C)/2 ■ Akika: Massage machine with Momikko ■ Bika: Massage machine with acupuncture press ■ Bika maxPB TB (PA, PB) = (a - PB + PA)(PB-C) ⇒ PB = (a + PA+ C)/2 ■ Cost prices are the same c demand function ■ Game equilibrium: P₁ = P₁ = a + c XA = aPA + PB, XB = a PB + PA - ■ Solve Model 20 when Akika and Bika have different cost prices CA and CB.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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