Two takeaway restaurants, ChipAhoy and FishDish, compete for business in a small seaside town. The manager of ChipAhoy has engaged you to advise on the pricing of its main offering, a fish & chips supper. Your intention is to analyse the situation as a twoplayer competitive game. After making background investigations, you have decided to adopt the following assumptions in your analysis. A1 The cost of the producing and serving a portion of fish & chips is the same for both restaurants: £3.50. A2 In a typical week, holidaymakers buy a total of 1500 portions of fish & chips, and local residents buy 1000 portions. A3 Local residents always choose the restaurant with the lower price. If prices are the same at the two restaurants, their custom is divided equally between the two. A4 Holidaymakers divide their custom 50:50 between the two restaurants, irrespective of the prices. Derive the Nash equilibrium/equilibria for the game
Two takeaway restaurants, ChipAhoy and FishDish, compete for business in a small seaside town. The manager of ChipAhoy has engaged you to advise on the pricing of its main offering, a fish & chips supper. Your intention is to analyse the situation as a twoplayer competitive game. After making background investigations, you have decided to adopt the following assumptions in your analysis.
A1 The cost of the producing and serving a portion of fish & chips is the same for both restaurants: £3.50.
A2 In a typical week, holidaymakers buy a total of 1500 portions of fish & chips, and local residents buy 1000 portions.
A3 Local residents always choose the restaurant with the lower price. If prices are the same at the two restaurants, their custom is divided equally between the two.
A4 Holidaymakers divide their custom 50:50 between the two restaurants, irrespective of the prices.
Derive the Nash equilibrium/equilibria for the game
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