Payoff for every firm depends upon the pricing strategies

Assignment Help Business Economics
Reference no: EM1360155

Suppose two competitors, Coa, Inc., and Han, Inc., are locked in a bitter pricing struggle in the aluminum industry. In the limit pricing payoff matrix, Coa can choose a given row of outcomes by offering a limit price ("up") or monopoly price ("down"). Han can choose a given column of outcomes by choosing to offer a limit price ("left") or monopoly price ("right"). Neither firm can choose which cell of the payoff matrix to obtain; the payoff for each firm depends upon the pricing strategies of both firms.

Han

Coa Pricing Strategy Limit Price Monopoly Price
Limit Price $1.5 billion, $3 billion $2.5 billion, $2 billion
Monopoly Price $1 billion, $4 billion $1.75 billion, $3 billion

a. Is there dominant strategy equilibrium in this problem? If so, what is it?
b. Is there Nash equilibrium in this problem? If so, what is it?

a. What is the firm's Total Revenue?

b. What is the Total Cost?

c. What is the firm's Total Profits?

d. If the above monopolist were to behave like a perfectly competitive firm (operating in the long run), determine its output.

 

Reference no: EM1360155

Questions Cloud

Determine the yearly dividend per share : The earnings for Crystal Cargo Corporation have been predicted for the next 5 years and are as follows. There is 1 million shares outstanding.
How a mentor and orientation can assist career development : How a Mentor and Orientation can Assist Career Development - Propose three ways that a mentor and a new employee orientation can assist employees with their career development.
What is the magnitude of the force between the two charges : what is the magnitude of the force between the two charges. The scale of vertical axis is set by vs = 5.10 m/s. What is the coefficient of kinetic friction between block and floor.
Calculate the dollar cost of using a money market hedge : Suppose the firm has no excess cash. Assume the spot rate of the pound is $2.02, the 180-day forward rate is $2.00. The British interest rate is 5 percent,
Payoff for every firm depends upon the pricing strategies : Neither firm can choose which cell of the payoff matrix to obtain; the payoff for every firm depends upon the pricing strategies of both firms.
How much slack is available in other departments : What are the key factors that determine when to add capacity and why would an organization want to reduce its capacity?
Design program that asks user to enter budgeted amount : "Design a program that asks the user to enter the amount that he or she has budgeted for a month. (For example: $2,000.00)
Leadership theories-gandhi versus martin luther king : How is the leader Mahatma Gandhi similar to or different from Martin Luther King Jr.? What theory or theories (Trait, Position Approach, Style Approach, or Distributed-Functions Approach ) would best account for the actions of this historical figu..
Explain the case study on accelerating ideas to market : Explain the Case Study on Accelerating Ideas to Market and The AIM Process

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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