Aidan and Celina are the only sellers of Jack Russell Terrier (JRT) in Antigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, based on the number of JRTs that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, after taking this information into account. The inverse demand function for JRTs is P(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell. Explain in detail what type of competitors are Aidan and Celina?
Aidan and Celina are the only sellers of Jack Russell Terrier (JRT) in Antigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, based on the number of JRTs that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, after taking this information into account. The inverse demand function for JRTs is P(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell. Explain in detail what type of competitors are Aidan and Celina?
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter23: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 17CQ
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Aidan and Celina are the only sellers of Jack Russell Terrier (JRT) in
Antigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, based
on the number of JRTs that she expects Aidan to sell. Aidan knows how Celina
will react and chooses the number of JRTs that she herself will sell, q2, after
taking this information into account. The inverse demand function for JRTs is
P(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell.
Explain in detail what type of competitors are Aidan and Celina?
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