The extreme end of the beach, Managerial Economics

Assume that Nicolas and Orson plan to sell soft drinks on a beach this summer. The beach is 400 meters long and sunbathers are spread evenly across its length. Nicolas and Orson sell the similar soft drinks at the same prices, so customers will walk to the closest vendor. Having the soft drink a distance  back to one's beach umbrella incurs transportation costs  due to walking to and from the vendor takes time and effort, and the soft drink heats up more (and tastes worse) the further a customer has to walk. Furthermore, the coast guard only permits the vendors to locate in one of the following places on the beach, as indicated by the figure shown below.

2397_aa.png

a) Where will Orson locate if Nicolas puts a stand at the extreme end of the beach? Does Orson's choice result in a Nash equilibrium?

b)  Does a Nash equilibrium exist in which both vendors locate in the center?

 

 

Posted Date: 3/26/2013 4:13:56 AM | Location : United States







Related Discussions:- The extreme end of the beach, Assignment Help, Ask Question on The extreme end of the beach, Get Answer, Expert's Help, The extreme end of the beach Discussions

Write discussion on The extreme end of the beach
Your posts are moderated
Related Questions
Question : i) Consider a discriminating monopolist is selling a product in two separate markets in which demand functions are: P 1 = 6 - Q 1 P 2 = 18 - 2Q 2 The mono

How do I do a log linear regression in excel

The Circular Flow of Income and Expenditure This is an economic model illustrating the flow of payments and receipts between domestic firms and domestic households. The househo

Problem 1: Using relevant examples, discuss the pricing strategies that firms can use to capture value from their customers. Problem 2: You are a manager in a perfectl

analyze the method by which firm can allocate the given advertising budget between different media of advertisement

SOME DIFFICULTIES IN MEASURING NATIONAL INCOME National Income Accounting is beset with several difficulties. These are: a.       What goods and services to include A

what is asset market theory theory in environmental economics?

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

neoclassical thinking assumes that all firms are established to make profit has been challenged by managerial discretion model.How successful have been these models to maximize pro

Development of Transportation and Marketing Facilitates: The expansion of an industry may expedite the development of transportation and marketing facilities that will decrease th