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4. Understanding pricing implications of product differentiation Aa Aa Consider the market for a new snack food produced by two firms, Crave-um and Snacktastic. Although the snacks are quite similar, Crave-ums snacks are saltier than Snacktastics snacks. To illustrate how each firm chooses a price for its snack, the following graph presents each firms best-response function. SNACKTASTICS PRICE 45-Degree Line Snacktastics BRF MC Crave-ums BRF MC CRAVE-UMS PRICE

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