The standardized assumption is that if firm 1 undercut firm 2's price, the entire market would shift to firm 1. However, the entire market will not move from one market to the other, even if the products are relatively identical. Furthermore, any differentiation will cause fewer customers to react to prices of other, similar, goods. Suppose that a f

Some common words found in the essay are:
, firm 1, firm 1's, product differentiation, price reaction, firm 1's price, price reaction curve, 1's price, average price, reaction curve, profit maximizing, 2's price, industry price output, 1's price reaction, firm 2's price, firm 2's,
Approximate Word count = 450
Approximate Pages = 2 (250 words per page double spaced)