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Unformatted text preview: restaurants figure out and copy the recipe for her new sauce? Answer : The most Louisa would be willing to pay in experimental costs is $500,000. She could charge all 100,000 patrons $5 more, but only for one night. After the first night, other producers would figure out the recipe and compete the price back down to $5 per plate. b. If it took the others one month to copy? Answer : Louisa would be willing to pay up to $15 million dollars ($500,000/day) (30 days/ month). She could charge an additional $5 per meal each night for a month before the other producers copy her recipe....
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This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.
- Spring '08