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Each and every consumer is ready to shell out at most $mathrm v =35 €$ for just a cake and he/she wishes to acquire at most one device. Each individual consumer bears a disutility in consuming an item that doesn't have strictly most well-liked qualities. Assume this disutility equals $t=2$ for each unit of distance. The marginal expenses of The 2 firms are equivalent $c_ B C =c_ E C =twelve$. Firms BC and EC contend by selecting price ranges. Suppose that agency BC has made a decision to generate with little sweetness, though EC has really sweet.
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