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How this relates to profits and consumer surplus.
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So with that in mind, let's just set the game up.
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So the players in this game are two firms
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and the strategies in this game for the firms
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and this is going to turn out to be important the strategies are
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the quantities that they produce of an identical product.
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So they are the quantities they produce,
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each of them produces, of an identical product.
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So as far as the consumers are concerned,
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these two products are perfect substitutes.
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You could think of these as two companies producing bottled water
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and now we're going to get hundreds of letters