In Autarka 2 amusement parks, Alfonso's wonderland and Bernice's rides there are 9600 people who like to visit an amusement park. Each of these consumers wants to visit one park once. The consumers' homes are evenly spaced across the island, and they each suffer a disutility of $24 for each kilometre they travel to reach an amusement park. With their current technology, it costs an amusement park $12 for each customer they host. At present, the equilibrium price for an amusement park ticket is $36, and each firm has a profit of $115,200. This market is best modelled as Hotelling competition. Fixed costs should be neglected. Treat this market as a one-shot game. Do not consider repetition or associated phenomena such as collusion or predatory pricing. Assuming Bernice's rides has a profit function of Nb(Pa,Pb) = 200(PaPb - Pb^2 + 36Pb -12Pa - 288), what is Bernice's rides best response function?
In Autarka 2 amusement parks, Alfonso's wonderland and Bernice's rides there are 9600 people who like to visit an amusement park. Each of these
consumers wants to visit one park once. The consumers' homes are evenly spaced across
the island, and they each suffer a disutility of $24 for each kilometre they travel to reach
an amusement park. With their current technology, it costs an amusement park $12 for each customer they
host. At present, the
has a profit of $115,200. This market is best modelled as Hotelling competition. Fixed costs should be neglected. Treat this market as a one-shot game. Do not consider repetition or associated phenomena such as collusion or predatory pricing.
Assuming Bernice's rides has a profit function of Nb(Pa,Pb) = 200(PaPb - Pb^2 + 36Pb -12Pa - 288), what is Bernice's rides best response function?
Let, the price of admission at Alfonso's Wonderland be = $PA.
The price of admission at Bernice's Wild Rides be = $PB.
The number of customers is x.
Transportation Cost (t) = $24.
Distance Covered = d kms.
Maximum Willingness to Pay= S.
Marginal Cost (MC) = $12
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