Consider the pizza stores introduced in Exercise U2, Donna's Deep Dish and Pierce's Pizza Pies.

1. Consider the pizza stores introduced in Exercise U2, Donna’s Deep Dish and Pierce’s Pizza Pies. Suppose that they are not constrained to choose from only two possible prices, but that they can choose a specific value for price to maximize profits. Suppose further that it costs $3 to make each pizza (for each store) and that experience or market surveys have shown that the relation between sales (Q) and price (P) for each firm is as follows: