# 1 points Save Answer Question 8 Suppose that there are two lemonade stands competing with one anothe

Question 8 Suppose that there are two lemonade stands competing with one another via Bertrand (price) competition There are 100 potential customers who walk by the two stands

each day Each of these customers will buy lemonade from whichever stand is cheapest as long as the price is less than 51 If they charge the same price then the customer chooses randomly between the two The marginal cost of lemonade is the $025 for both stands Fixed Costs are equal to $5 for each stand What is the Nash equilibrium

price of lemonade? A a $025

A b 5030

A c $035

C Â«13100 1 points Save Answer

Question 9 Suppose thatJason and Chad each are thinking of opening up a diet coke stand on the fourth ?oor of this building Suppose that potential customers are evenly spaced on

a distance that is normalized to 1 Customers will buy a diet coke from whichever stand requires the least walking If they are the same distance the customer will ?ip a

coin This is depicted below I o 114 1:2 :14 1 lfJason is currently at 3/4, what is Chadâ€™s best response?

A aJust left of 1/2 A bJust right of 3/4

A cJust left of 3/4

A d 1/2

1 points Save Answer

Question 10 ,7,7 Suppose thatJason and Chad each are thinking of opening up a diet coke stand on the fourth ?oor of this building Suppose that potential customers are evenly spaced on a distance that is normalized to 1 Customers will buy a diet coke from whichever stand requires the least walking If they are the same distance the customer will ?ip a

coin This is depicted below I D 1 I4 1R 3M 1 Suppose that Jason and Chad are simultaneously choosing the location of their stands, what is the Nash Equilibrium location?

A a Chad and Jason put their stands right next to each other at 1/2 A b There is no Nash Equilibrium

A c One of them puts a stand at 3/4 and the other puts a stand at 1/4

A d One of them puts a stand at 0 and the other puts a stand at 1