Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. a town has two pie stores, anna and beatrice. it c

A town has two pie stores, Anna and Beatrice. It costs each store $11 to produce...

90.2K

Verified Solution

Question

Economics

A town has two pie stores, Anna and Beatrice. It costs eachstore $11 to produce a pie. Let P1 denote Anna's price and P2denote Beatrice's price per pie. Let Q1 and Q2 denote the demandfor each store's pies per day. The store's demands are givenby:
Q1 = 100- 4P1 + 2P2
Q2 = 100- 4P2 + 2P1
Assuming stores compete in price
1)Write the profit function for Anna’s in terms of eachstore's strategies.
Write the profit function for Beatrices in terms of eachstore's strategies.
2)Find the best response functions of each store.
3)Find the Nash Equilibrium of the game assuming firms chooseprices simultaneously.

Answer & Explanation Solved by verified expert
4.5 Ratings (747 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

EatWell Inc., a large fast-food chain company of Canada, wants to test two versions of a...

Mechanical Engineering
1.2K views

Please derive the full expression of the rotation matrices R123(φ, θ, ψ) and R321(ψ, θ, φ).

Civil Engineering
1.2K views

Ocean Thermal Energy Conversion (OTEC) systems play a major role in getting power from the ocean....

Biology
1.2K views

It is estimated that a flock of wood buffalo crane should be able to sustain...

Physics
1.2K views

74 The focal length of convex lens for red and blue light are 100 cm...

Basic Math
1.2K views

ce mpletion This test can be saved and This test does not allow backtracking Changes...

Algebra
1.2K views

30 Which is the equation of the parabola with 5 0 and 1 0 and...

Accounting
1.2K views

Should a separate audit program be prepared for each audit engagement, or can a standard...

Accounting
1.2K views

Cove's Cakes is a local bakery. Price and cost information followis: Required: 1. Calculate Cove's...

Accounting
1.2K views

Pharoah Clark opened Pharoah's Cleaning Service on July 1, 2022. During July, the following transactions...

Accounting
1.2K views

With regard to liabilities, liquidity refers to a.a company's operating cycle. b.a company's ability to...

Accounting
1.2K views

Convers Corporation (calendar year-end) acquired the following assets during the current tax year: (ignore 179...