Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Let's use an oligopoly model to understand why it may be better for competing firms if one of them assumes the role of a price leader (ABI in this story), while others follow (MillerCoors'), relative to a situation where they choose price simultaneously (not literally simultaneously, but when one chooses its pricing strategy it does not know the pricing strategy of rivals). Use a Bertrand duopoly price competition model with product differentiation to demonstrate that prices and profits are greater if firms sequentially set prices than if they simultaneously set prices. The point of the model is to demonstrate that firms are better off with leader-follower pricing than with simultaneously pricing. More specifically, use D_1 = a -p_1 + p2/2 and D_2 = a - P_2 + p1/2 as the demand functions for the two firms, 1 and 2, and assume zero marginal cost.
1. Solve the game first by assuming that firms set their prices simultaneously.
2. Then solve it again by assuming that firm 1 is the leader (sets its price first) and firm 2 is the follower (after observing the price of the leader it sets its own price). I11 both cases the firms compete with each other (no collusion).
3. Compare the equilibrium prices and profits between a) and b) above. Which one yields higher prices and profits? What is the intuition? In developing an intuition use the taxonomy we discussed in lecture (strategic complements vs. substitutes and tough vs. soft commitments).
show how consumers make purchase desicions, on the basis of each model of consumer desicion making cognitive, emotional, paasive.
What are the short-run equilibrium values of the price level, expected price level, output, and unemployment rate. Illustrate what are the values of cyclical unemployment and unanticipated inflation.
Suppose a particular labour market were in market-clearing equilibrium. What could happen to cause equilibrium wage to fall. If all money wages rose with inflation each year, how would real wages in this market adjust.
How does domestic price ratio change. How will country's production pattern change. How will its consumption and trade pattern change. How is welfare affected. Is re a difference to import tariff.
A perfectly competitive firm sells 50,000 units of knives at a price of $3. The firm's average cost at 50,000 units is $2.75. Calculate the firm's profit. Please verify answer twice before sending back to me the steps. I want to make sure I have the ..
If inflation turns out to be 1% over the life of the loan, what is the real interest rate? Who gains from unexpectedly low inflation, Loretta or Ted?
The demand for borrowed funds is, The income of Lebron James, for example, is determined by, The income to someone such as Lebron James is
A state government is considering construction of a flood control dike having a life span of 12 years. History indicates that a flood occurs every 4 years, on average, and causes $500,000 in damages on each occasion. If the state uses a MARR of 12% p..
Assume that a corrective tax is placed on aircraft passing over a residential area that is located near an airport. Should the proceeds of the corrective tax be used to compensate those who are harmed by the aircraft noise? Explain.
Do you think illegal drug interdiction or successful drug education is the better policy to reduce drug addiction in the United States? Do you think simultaneous implementation of both policies is best? Why? Provide specific examples to support your ..
Suppose that the nonlinear price discriminating monopoly in panel a of figure 12.4 can set three prices, depending on the quantity a consumer purchases. Where Q is its quantity, p is its price, and A is its level of advertising. Its marginal cost of ..
The project management role has several responsibilities in the area of scope. Which of the following represent these areas for scope.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd