prod_differ_prob

# prod_differ_prob - Problems on Product Dierentiation 1 Two...

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Problems on Product Di/erentiation are (imperfect) substitutes. Suppose demand functions are linear in both prices. An True or False. Explain. True or False. Explain. 3. Two &rms choose simultaneously prices in a market where the goods sold are comple- True or False. Explain. located at the extremes of a line. Suppose consumers have positive transportation cost its consumers transportation cost? Explain. 5. Consider game 2 played in class. Suppose that consumers are willing to pay a maximum other one. What is true about the equilibrium of this game? Explain your answer. (a) Both charging \$12 is an equilibrium. demands, respectively: q 1 = 10 2 p 1 + p 2 q 2 = 20 3 p 2 + 2 p 1 : Explain. 7. There are three cities f L; M; R g : Firm one is located at L . Firm two must choose its location. After it chooses its location, it must choose a price which could be either L chooses its own price from the same set. If marginal cost is \$3, Explain.

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## This note was uploaded on 10/15/2008 for the course ECON 171 taught by Professor Hopenhayn during the Spring '07 term at UCLA.

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prod_differ_prob - Problems on Product Dierentiation 1 Two...

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