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Explain why the payoff matrix in Problem 1 indicates that firms A and B face the prisoners' dilemma? Why?
The optimal strategy for firm A and firm B in problem 1(c) is to adopt its dominant strategy of charging a low price. Do firms A and B in Problem 2 face the prisoners' dilemma? Why?
Given the following payoff matrix, (a) indicate the best strategy for each firm. (b) Why is the entry-deterrent threat by firm A to lower the price not credible to firm B? (c) What could firm A do to make its threat credible without building excess capacity?
The strategies for firm A are low price and high price and the strategies for firm B are enter and don't enter. 10(b) is asking whether firm A will use the low price as a threat if firm B enters?
What strategic industrial or trade policy would be required (if any) in the United States and in Europe if the entries in the top left cell of the payoff matrix in Table 11-8 were changed to (5, -10)?
both Boeing and Airbus would be producing the aircraft without the need for any subsidy, and no strategic industrial and trade policy would be needed whether in the U.S. or in Europe.
Assume that the price was 5% lower and all other factors do not change. How much more would you buy each year? Using this information, compute the own-price elasticity of your demand.
Discuss the importance and cost of research and development. Does every drug pay off Is strategic behavior important in this market Is product differentiation important in this market
Describe the revenue, costs, and profit that Starbucks expected when it entered this market.
How many spaghetti dinners should the firm make each day and what if the firm has avoidable fixed costs of $1562.50?
How does the investment banks industry fit into the perfectly competitive model - Special characteristics of purely competitive firms
Assume that a simple society has economy with only one resource, labor. Labor can be employed to produce only two commodities- X, a necessity good (food) and Y, a luxury good ( music and entertainment). Assume the economy produced at a point inside..
Discuss the advantages and disadvantages regarding salary, office setup costs, work schedules, patient payment options, and malpractice insurance,.Conclude your analysis by choosing one of the options and explaining why you've done so.
Suppose desired investment for the economy represented in the table above is $200 billion. Plot the consumption and investment function. What value is the equilibrium level of income What is the marginal propensity to consume
A manager at strateline manufacturing much choose between twoshipping alternatives: two day freight and five-day freight. Using five day freight would cost $135 less than using two day frieght.
A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue so $10, average total cost of $8 and fixed cost of $200. what is the profit.
The present value of the gain from employing the new factory must be less or equal to $50 million and the rate of return from the new factory must be greater than 7%.
Derive the average cost of producing 100,000, 200,000, 300,000, and 400,000 devices per year with plant A. (For outputs exceeding the capacity of a single plant, assume that more than one plant of this type is built.)
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