Competing restaurants Hot Dog King and Hot Dog Chef are attempting to determine their advertising budgets for
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Competing restaurants Hot Dog King and Hot Dog Chef are attempting to determine their advertising budgets for next year. The two restaurants will have combined sales of $240 million and can spend either $6 million or $10 million on advertising. If one restaurant spends more money than the other, then the restaurant that spends more money will have sales of $190 million. If both companies spend the same amount on advertising, then they will have equal sales. Each dollar of sales yields 10¢ of profit. Suppose each restaurant is interested in maximizing (contribution of sales to profit) - (advertising costs). Find an equilibrium point for this game.
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Related Book For
Operations Research Applications And Algorithms
ISBN: 9780534380588
4th Edition
Authors: Wayne L. Winston
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