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There are two bait camps named Brown and Sugar in an island. These two bait camps compete very fiercely for consumers. Consumers tend to be
There are two bait camps named "Brown" and "Sugar" in an island. These two bait camps compete very fiercely for consumers. Consumers tend to be sensitive to price, with the assumption that the products of the two bait camps are identical. The demand function for this market is Q- 25000 - 150P. If the respective bait camps have a capacity of 15,000 people for "Brown" and 23,000 people for "Sugar", they can have the same marginal cost as the average cost of 80. a. What is the market equilibrium for the two firms in terms of both price and quantity? And what is the company's profit? b. Suppose the market is growing so that the demand for fishing will increase to Q - 58,000 - 150P, but their capacity is still the same and serve more. What is the Nash Equilibrium result for the price as well as the quantity? And how much profit is each company get now
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