Homework Answers
"B"
If they both are expected to compete then also the Nash equilibrium will not change as none of the firm will shift to the low price because it will make them face loss. High price of both the firm is a Nash equilibrium.
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Exhibit 10-6 Two-Firm Payoff Matrix Ajax Company High price 8 8 16 S60 Dition 8 Widget...
Exhibit 10-6 Two-Firm Payoff Matrix Ajax Company High price Low price $00 bilion $20 bilion $60...
Exhibit 10-6 Two-Firm Payoff Matrix Ajax Company High price Low price $00 bilion $20 bilion $60 bilion $10 bilion $10 bilion $20 bilion $20 bilion $20 bilon Suppose costs are identical for the two firms in Exhibit 10- 6. Each firm assumes without formal agreement that if it sets the high price its rival will not charge a lower price. Under these "tit-for-tat" conditions, equilibrium will be established by: Widget Co. charging the high price and Ajax Co. charging the...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players: Movietonia and Videotech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its players. Videotech Pricing High Low High 9,9 2, 15 Movietonia Pricing Low 15, 2 8,8 For example, the lower-left cell shows that Movietonia prices low and Videotech prices high, Movietonia...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High High Low Flashfone Pricing Low , 15 8,8 11, 112 15,2 For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone...
The widget market is controlled by two firms: Acme Widget Company and Widgetway Manufacturing. The structure...
The widget market is controlled by two firms: Acme Widget Company and Widgetway Manufacturing. The structure of the market makes secret price cutting impossible. Each firm announces a price at the beginning of the time period and sells widgets at the price for the duration of the period. There is very little brand loyalty among widget buyers so that each firm's demand is highly elastic. Each firm's prices are thus very sensitive to inter-firm price differentials. The two firms must...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray pla...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players: Movietonia and Videotech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its players. For example, the lower-left cell shows that if Movietonia prices low and Videotech prices high, Movietonia will earn a profit of $18 million, and Videotech will earn a profit of $2...
(10 marks: 1 mark each) Use the following payoff matrix for a 2-firm oligopoly to answer...
(10 marks: 1 mark each) Use the following payoff matrix for a 2-firm oligopoly to answer the questions below Firm A: High Price Low Price A = 1000: A = 1250; High Price B = 1000 B = 300 Firm B: A = 300; A = 700; Low Price B = 1250 B = 700 a. If the two firms above collude, the profits for each of the 2 firms would be: Firm A Profits Firm B Profits b. Suppose...
BBlank answer choices: 1. (High, Low ) 2. (High, Low) 3. (High, Low) 4. (High, Low) 5. (Is, Is not) 6. Using a payoff ma...
BBlank answer choices:
1. (High, Low )
2. (High, Low)
3. (High, Low)
4. (High, Low)
5. (Is, Is not)
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low Flashfone Pricing High Low 11, 113,...
Question 19 10 pts 19. Answer the next question based on the payoff matrix for a...
Question 19 10 pts 19. Answer the next question based on the payoff matrix for a two-firm oligopoly where the numbers represent the firms' respective sales given each of their pricing strategies: FIRM X Strategies: High-price Low Price High-price X = $625,000 X = $725,000 Y= $625,000 Y = $275,000 Low-price X = $275,000 X = $400,000 Y = $725,000 Y= $400.000 FIRMY If both firms were doing a high-price strategy and then one firm cuts prices but the other...
Drop Down Menu Options: 1) high/low 2) high/low 3) high/low 4) high/low 5) is/is not 6....
Drop Down Menu Options:
1) high/low
2) high/low
3) high/low
4) high/low
5) is/is not
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High 10, 10 16,5 High Low Low 5,16 7,7 Flashfone Pricing For example,...
Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix...
Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low Flashfone Pricing High 8, 8 4, 13 Low 13, 4 7, 7 For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $13 million, and...
Exhibit 10-6 Two-Firm Payoff Matrix Ajax Company High price Low price $00 bilion $20 bilion $60 bilion $10 bilion $10 bilion $20 bilion $20 bilion $20 bilon Suppose costs are identical for the two firms in Exhibit 10- 6. Each firm assumes without formal agreement that if it sets the high price its rival will not charge a lower price. Under these "tit-for-tat" conditions, equilibrium will be established by: Widget Co. charging the high price and Ajax Co. charging the...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players: Movietonia and Videotech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its players. Videotech Pricing High Low High 9,9 2, 15 Movietonia Pricing Low 15, 2 8,8 For example, the lower-left cell shows that Movietonia prices low and Videotech prices high, Movietonia...
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High High Low Flashfone Pricing Low , 15 8,8 11, 112 15,2 For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone...
(10 marks: 1 mark each) Use the following payoff matrix for a 2-firm oligopoly to answer the questions below Firm A: High Price Low Price A = 1000: A = 1250; High Price B = 1000 B = 300 Firm B: A = 300; A = 700; Low Price B = 1250 B = 700 a. If the two firms above collude, the profits for each of the 2 firms would be: Firm A Profits Firm B Profits b. Suppose...
BBlank answer choices:
1. (High, Low )
2. (High, Low)
3. (High, Low)
4. (High, Low)
5. (Is, Is not)
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low Flashfone Pricing High Low 11, 113,...
Question 19 10 pts 19. Answer the next question based on the payoff matrix for a two-firm oligopoly where the numbers represent the firms' respective sales given each of their pricing strategies: FIRM X Strategies: High-price Low Price High-price X = $625,000 X = $725,000 Y= $625,000 Y = $275,000 Low-price X = $275,000 X = $400,000 Y = $725,000 Y= $400.000 FIRMY If both firms were doing a high-price strategy and then one firm cuts prices but the other...
Drop Down Menu Options:
1) high/low
2) high/low
3) high/low
4) high/low
5) is/is not
6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High 10, 10 16,5 High Low Low 5,16 7,7 Flashfone Pricing For example,...
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