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So if she consumes from Firm 2 she has to walk 1 -Y.
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That's going to turn out to be key in our model
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as we'll see in a second.
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So firms, as before,
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are going to set prices.
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I won't write everything down because it's all written down
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on the homework assignment which is already on the web,
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but in fact firms are going to maximize profits,
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aim to maximize profits,
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firms are going to have constant marginal costs.
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We'll make one other assumption to keep life simple.
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We'll assume that each consumer buys one and only one product.