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The small city of Le Locle has been served by the same local newspaper for the last 30 years called the Le Locle Tribune. The Tribune is written in a fairly conservative style yet, the demographic of the city is comprised of avid readers of a broad spectrum of political dispositions. A new newspaper firm plans on entering the market. This new paper will call itself the Le Locle Examiner.

a. What would you expect would be the degree of price competition between the two firms?
b. Along the political spectrum of liberal to conservative, in what style might Le Locle Examiner be expected to be written? describe your answer.
c. Considering political disposition as an axis of product differentiation, does vertical or horizontal differentiation best categorize it?

Microeconomics, Economics

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