Question: Two caf s , The Java Club and Caf Robusta, split the market for coffee on your college campus. Both have a marginal cost per
Two cafs The Java Club and Caf Robusta, split the market for coffee on your college campus. Both have a marginal cost per cup of coffee of $ are equally convenient to access, and, as far as anyone can tell, serve identical coffee. The market demand for cups of coffee on an average day is Assume the two cafs compete by setting a price, that is Bertrand competition. If The Java Club sets its price at $ and Caf Robusta sets its price at $ The Java Club will earn a daily profit $ of:
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