Suppose 2 Bros. Pizza opens a shop close to the existing two shops and sells the same pizza. It can supply 400 slices of pizza each day, and its production cost is also 80 cents. Customers still prefer to buy from the cheaper shop, and if more than one shop charges the same lowest price, they split the market equally.
Required:
Find a Nash equilibrium of the price competition among the three shops.
Answers: 3
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Suppose 2 Bros. Pizza opens a shop close to the existing two shops and sells the same pizza. It can...
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