Question
Little Italy has 100 consumers all of whom buy either one pizza or nothing. Each consumer has a reservation price of $15. That is,
Little Italy has 100 consumers all of whom buy either one pizza or nothing. Each consumer has a reservation price of $15. That is, each consumer is willing to pay at most $15 for a pizza. There are two pizza stores - A and B - located next to each other. It costs $7 to make a pizza. Let pa and pb denote the price charged by stores A and B respectively. For simplicity, assume Pi {12, 15} for both i = A, B. Hereafter we ignore the dollar sign. Thus, prices can take just one of the two values - 12 or 15. If p;
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Microeconomics
Authors: Paul Krugman, Robin Wells
3rd edition
978-1429283427, 1429283424, 978-1464104213, 1464104212, 978-1429283434
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