Suppose the sneaker industry is an oligopoly with two competing firms, Velocity and Laces. There is some product differentiation, as Velocity produces mostly athletic sneakers, while Laces focuses more on casual sneakers for everyday wear. The graph below represents these companies' competition using the Bertrand model with differentiated products. Velocity best response 17 30 Laces price (P 30 Velocity price (P) Laces best response Refer to Figure 13-2. Increasing product differentiation between Velocity and Laces allows them both to without losing many customers to the other. a. raises quantity Ob. lower quantity Oc. lower prices Od. raise prices

Suppose the sneaker industry is an oligopoly with two competing firms, Velocity and Laces. There is some product differentiation, as Velocity produces mostly athletic sneakers, while Laces focuses more on casual sneakers for everyday wear. The graph below represents these companies' competition using the Bertrand model with differentiated products. Velocity best response 17 30 Laces price (P 30 Velocity price (P) Laces best response Refer to Figure 13-2. Increasing product differentiation between Velocity and Laces allows them both to without losing many customers to the other. a. raises quantity Ob. lower quantity Oc. lower prices Od. raise prices

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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