How puffs sets up its factories and distribution networks

Reference no: EM13222900

You are a manager of Kleenex and you compete directly with Puffs selling facial tissues in America. Consumers find the two products to be indistinguishable. The inverse market demand for facial tissues is P = 3-Q (in dollars) in America and both firms produce at a marginal cost of $1. You have a decision to make about competing with Puffs in New Zealand, where the inverse market demand for facial tissues is P = 3-Q.

Option A. Puffs sets up its factories and distribution networks now, and you set up later. And both produce at a marginal cost of $1.00

Option B. You hurry set up your factories and distribution networks now, and Puffs sets up later. Your hurry means your marginal costs are $1.20, while Puffs marginal costs remain $1.00
Which Option is better for Kleenex?

Reference no: EM13222900

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