Explain which technology would you advise the ceo

Assignment Help Business Economics
Reference no: EM1345813

Defendo has decided to introduce a revolutionary video game, and as the first in the market. In deciding what type of manufacturing plant to build, it has the choice of two technologies. Technology A is publicly available and will result in annual costs of C (the power of A) (q) = 10 +8q.

Technology B is a proprietary technology developed in Defendo's research labs. It involves higher fixed cost of production, but lower marginal costs: C(the power of B) (q) = 60 +2q

Defendo's CEO must decide which technology to adopt. Suppose Defendo expects its archrival, Offendo, to consider entering the market shortly after Defendo introduces its new product. Offendo will have access only to Technology A. If Offendo does enter the market, the two firms will play a Cournot game (in quantities) and arrive at the Cournot-Nash equilibrium. Market demand for the new product is P=20-Q, where Q is total industry output.

Explain which technology would you advise the CEO of Defendo to adopt given the threat of possible entry? Also what will be the Defendo's profit given his choice? [Hint: Draw the game tree, and solve for the equilibrium for this sequential move game.]

Reference no: EM1345813

Questions Cloud

Computing total number of keys needed in symmetric cipher : Determine the total number of keys that are needed for organization if symmetric cipher is used.
Finding the best sources of finance : Best Hardware is planning financing for 2 activities. The 1st activity deals with the expansion of the business' warehouse to house inventory as demand is increasing.
Find the conflict styles and tactics : Find the conflict styles and tactics involved in specific conflicts and examine how groups and individuals react during conflict.
Global finance-optimal financing-investment strategy : Employ foreign exchange and cost of capital data to determine appropriate capital sources. Please describe why and how you came to these conclusions. Also make sure to site sources.
Explain which technology would you advise the ceo : Explain which technology would you advise the CEO of Defendo to adopt given the threat of possible entry. Also what will be the Defendo's profit given his choice.
Manage project communications : Manage Project Communications - Explain the tools a project manager may use to control and manage project communications.
Determining ciphertext generated by encryption : Determine ciphertext (in binary form) generated by encryption of character X?
Find the initial cost and total value : The management of Mitchell labs announced to go private in 2002 by purchasing in all 3 million of its outstanding shares at 19.50/share. By 2006 management had restructured the firm by selling off petroleum research division for 13 million.
Communication and business abroad : Explain what does the Indian business woman need to know about the male executive of this South American Country

Reviews

Write a Review

 

Business Economics Questions & Answers

  Long -run marginal propensity

Explain why this formulation of consumption may provide a more accurate description of consumption than the simple consumption function that depends only on current income.

  How information affect your calculation of inflation rate

If you were to learn about a bottle of gatorade increased in size from 2009 to 2010, should that information affect your calculation of the inflation rate. If so, how.

  Comparative advantage in producing

Illustrate what are some examples of goods which the U.S. has comparative advantage in producing.

  Balnurs opportunity cost of production

In 2012, Balnur taught music and earned $20,000. She also earned $4,000 by renting out her basement. On January 1, 2013, she quit teaching, stopped renting out her basement, and began to use it as the office for her new Web site design business.

  English is becoming the usual language

English is becoming the usual language for international transactions, even if the language of neither country is English.

  Compute the yield to maturity

Compute the yield to maturity to the nearest percentage point.

  Impact of the shrinking world

What is the impact of the shrinking world on whether small to medium sized businesses should engage in international trade.

  Edison electric companys president

Edison Electric Company's president has been arguing that residential electric rates need to be raised relative to industrial rates.

  Advantages and disadvantages of regression models

What are the advantages and disadvantages of regression models in comparison to using a computerized regression routine.

  Values for constructing the interval

Use EViews to get the correct critical t values for constructing the interval.

  What is wirelesses producer

What is Wirelesses' producer surplus from sales for each low-demand as well as consumer.

  Illustrate what type of unemployment will then occur

illustrate what type of unemployment will then occur. What is the natural rate of unemployment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd