The fudge makers compete in a Bertrand market structure with differentiated products. The demand curve for Fudge Factory is given by where p_F is the price for fudge at Fudge Factory and p_C is the price at Chocolate Corner. The demand curve for Chocolate Corner is given by
Fudge Factory's cost is C_F = 5q_F and Chocolate Corner's cost is C_C = 5q_C. In equilibrium, the price of fudge at the Chocolate Corner is $____.

Question

The fudge makers compete in a Bertrand market structure with differentiated products. The demand curve for Fudge Factory is given by

where p_F is the price for fudge at Fudge Factory and p_C is the price at Chocolate Corner. The demand curve for Chocolate Corner is given by

Fudge Factory's cost is C_F = 5q_F and Chocolate Corner's cost is C_C = 5q_C. In equilibrium, the price of fudge at the Chocolate Corner is $____.

Quizplus · Accepted Answer

The Answer of The fudge makers compete in a Bertrand market structure with differentiated products. The demand curve for Fudge Factory is given by where p_F is the price for fudge at Fudge Factory and p_C is the price at Chocolate Corner. The demand curve for Chocolate Corner is given by Fudge Factory's cost is C_F = 5q_F and Chocolate Corner's cost is C_C = 5q_C. In equilibrium, the price of fudge at the Chocolate Corner is $____.

The Fudge Makers Compete in a Bertrand Market Structure with Differentiated