Now suppose that during graduation time, one local franchise…
Now suppose that during graduation time, one local franchise of Rise N’ Roll sells its cookies at graduation parties at the University of Notre Dame and IUSB using price discrimination. Since Rise N’ Roll can price discriminate, it faces two different demand functions for the cookies sold at the two universities:
Read DetailsNow, consider the incumbent’s decision in the first subgame….
Now, consider the incumbent’s decision in the first subgame. What must be true of b in order for there to be deterred entry? In other words, what must be true of b in order for the potential rival to want to enter but the incumbent pays the exclusivity fee?
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