Fish Tank
That guy
- Joined
- Aug 22, 2009
- Messages
- 279
- Gender
- Male
- HSC
- 2010
It's economically viable to have streetlights so that your consumers don't kill themselves while driving at night. Small investment to keep your market alive.Firm constructs and operates a toll road: doesn't offer street lights
Competitor realises it can capture the market of aforementioned toll road if it constructs a new toll road of its own, but with street lights.
If the market dictates that street lights are preferred to no street lights, and its economically viable construct a toll road with street lights, then there shall be street lights!
edit: yes I know this is retarded
editedit: Or a firm will offer a lower toll to consumers to use its roads instead of having street lights. It depends how much street lights are worth to consumers.
This is all pretty much just basic game theory crap... optimal solution will be achieved.