Type-2 rivalry can be explained by taking the coffee store example from Briefing 50 forward in time to a point where all potential customers have been captured; that is, when the market is mature.
The two stores have charged the same expected price of $2.95 for a typical product and each has half of the market’s total of 5 000 customers.

Halfway through the year, the two stores make the same decisions as before: we lower our price to $2.80 and ...