This is a Hotelling model question There are two firms, A and B. Firm A has a marginal cost=$4, and Firm B has a marginal cost=$6. For both: N=4,000 V=max willingness to pay=$40 travel cost=$8/1mile Please find the best response functions for both firms and graph them.
This is a Hotelling model question There are two firms, A and B. Firm A has a marginal cost=$4, and Firm B has a marginal cost=$6. For both: N=4,000 V=max willingness to pay=$40 travel cost=$8/1mile Please find the best response functions for both firms and graph them.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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This is a Hotelling model question
There are two firms, A and B. Firm A has a marginal cost=$4, and Firm B has a marginal cost=$6.
For both:
N=4,000
V=max willingness to pay=$40
travel cost=$8/1mile
Please find the best response functions for both firms and graph them.
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