Problem
Three firms compete in the fictional widget industry: Alpha, Beta and Gamma.
All three have identical products and the same cost of Ca,b,c=100. They each have many suppliers available to them. Firms can't communicate with each other to coordinate prices, and they can't advertise.
The industry has two customers. The willingness to pay for each customer is Wa,b,c=200.
Each firm can sell to one customer only. This means that one firm will be idle.
If firms and customers compete to get the best possible deal:
a) What will be the resultant price in the market?
b) How much value will be created by all the players?
c) How much value will customers capture?
d) How much value will each firm capture (i.e., firm profit)?