Infer about the market share of each firm

Reference no: EM13688015

Presume 2 firms are found on the real line [0,1]. Firm 1 is located at a=.15, and Firm 2 is located at 1-b, where b=.15. Suppose P1=P2=$10. Consumers face a distance cost of $2 per square unit of distance. What can you infer about the market share of each firm? Presume Firm One lowers its price to $9, how does this change the market share? Further, presume transportation costs increase to $5 per square unit of distance. How does this additional change alter the market shares of the two firms?

Reference no: EM13688015

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