Question
In: Economics
1.) Fizzy Water Inc. and Bubbly Water Co. are Cournot competitors in the sparkling water industry....
1.) Fizzy Water Inc. and Bubbly Water Co. are Cournot competitors in the sparkling water industry. Let the output of each competitor be denoted by QF and QB, respectively. The demand curve for sparkling water is given by P = 422 - Q where Q = QF + QB. If each firm has a marginal cost of production equal to $56 what is the price level that will be charged in the market in equilibrium?
a.) 244 b.) 122 c.)366 d.)178
2.) You are the manager of Big Cats Real Estate which specializes in construction of luxury apartment buildings. Your marketing team informs you that the company has to choose an advertising strategy in order to compete with your largest competitor, C. Baskin Builders. You are given the following information:
If C. Baskin Builders runs an "aggressive" ad strategy and if you choose to run an "aggressive" strategy in response, your revenues will increase by $2,800,000. If you choose to run a "passive" ad strategy in response your revenues will increase by $1,900,000.
If C. Baskin Builders chooses to run a "passive" ad strategy instead, your company would see revenues increase by $3,700,000 if you ran an "aggressive" ad strategy. Your revenues would increase by $2,900,000 if you ran a "passive" strategy in response.
Which of the following is true?
A.) Big Cats Real Estate should choose a mixed strategy in advertising to maximize payoffs.
B.) Big Cats Real Estate has a dominant strategy in "aggressive" advertising.
C.) Not enough information to answer this question.
D.) Big Cats Real Estate has a dominant strategy in "passive" advertising.
Please explain
Solutions
Rahul Sunny answered 6 months agoRelated Solutions
The geegaw industry consists of two Cournot competitors producing an identical product. The inverse demand equation...
The geegaw industry consists of two
Cournot competitors producing an identical product. The inverse
demand equation is
P=591-4Q.
The total cost equations of the two firms are:
TC1=15Q1;
TC2=31Q2.
a. Determine the
total revenue equation for each firm.
b. What is the
reaction function of each firm?
c. What is
the Cournot-Nash equilibrium level of output?
d. What is the
market-determined price of geegaws?
e. Calculate each
firm’s total profit.
A sparkling-water distributor wants to make up 200 gal of sparkling water to sell for $5.00...
A sparkling-water distributor wants to make up 200 gal of
sparkling water to sell for $5.00 per gallon. She wishes to mix
three grades of water selling for
$99.00, $22.00, and $4.50 per gallon, respectively. She
must use twice as much of the $4.50 water as the $2.00, water. How
many gallons of each should she use?
Sparkling Water, Inc., expects to sell 3.7 million bottles of drinking water each year in perpetuity....
Sparkling Water, Inc., expects to sell 3.7 million bottles of
drinking water each year in perpetuity. This year each bottle will
sell for $1.46 in real terms and will cost $.82 in real terms.
Sales income and costs occur at year-end. Revenues will rise at a
real rate of 1.9 percent annually, while real costs will rise at a
real rate of 1.1 percent annually. The real discount rate is 7
percent. The corporate tax rate is 22 percent. What...
Sparkling Water, Inc., expects to sell 2.98 million bottles of drinking water each year in perpetuity....
Sparkling Water, Inc., expects to sell 2.98 million bottles of
drinking water each year in perpetuity. This year each bottle will
sell for $2.15 in real terms and will cost $1.08 in real terms.
Sales income and costs occur at year-end. Revenues will rise at a
real rate of 6 percent annually, while real costs will rise at a
real rate of 5 percent annually. The real discount rate is 12
percent. The corporate tax rate is 34 percent.
...
Messrs Bertrand and Cournot are competitors in the market for gadgets. The demand conditions in this...
Messrs Bertrand and Cournot are competitors in the market for
gadgets. The demand conditions in this market are given by the
equation Q=1000-P, and both Bertrand and Cournot can supply the
market with gadgets at a constant marginal cost equal to five
crowns (they incur no other costs to run their enterprises).
i. Describe in detail what conditions will give rise to price
competition between Bertrand and Cournot. Given that they compete
by choosing prices, what is the equilibrium price...
You are designing a system to add CO2 to water to make carbonated water (sparkling water,...
You are designing a system to add CO2 to water to make
carbonated water (sparkling water, like Club Soda or Perrier). If
the gas pumped into the bottle above the water is at a pressure of
2 atmospheres and is composed of 100% CO2, what is the equilibrium
concentration of dissolved CO2 in the water? If the pH of the water
is 5.0, what is the concentration of CO3^-2, HCO3-, and H2CO3 ?
(KH=0.0334 mol/L*atm)
CO2(aq) + H2O<-----> H2CO3
H2CO3...
Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product...
Jones Co. is in a technology-intensive industry. Recently, one
of its competitors introduced a new product with technology that
might render obsolete some of Jones’s inventory. The accounting
staff wants to follow the appropriate authoritative literature in
determining the accounting for this significant market event.
Instructions If your school has a subscription to the FASB
Codification, log in and prepare responses to the following.
Provide Codification references for your responses. a. Identify
the primary authoritative guidance for the accounting for...
Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product...
Jones Co. is in a technology-intensive industry. Recently, one
of its competitors introduced a new product with technology that
might render obsolete some of Jones's inventory. The accounting
staff wants to follow the appropriate authoritative literature in
determining the accounting for this significant market event.
Instructions
(a) Identify the primary authoritative guidance for the
accounting for inventories.
(b) List three types of goods that are classified as inventory.
What characteristic will automatically exclude an item from being
classified as inventory?...
VOSS Water Questions: 1) Describe the water. What is it, and what differentiates it from competitors?...
VOSS Water
Questions:
1) Describe the water. What is it, and what differentiates it
from competitors?
2) Discuss the packaging- what is unique about the packaging?
Does it create perceived value for consumers (how/why)? Is it
effective in differentiating the product from others on the shelves
(how/why)?
3) Talk about the Brand. How does the brand help or harm the
product? Is the brand easily recognizable to consumers? How does
the product showcase brand? What is the reputation of the...
A) Two firms operate as Cournot competitors. Inverse demand is P = 120 - 2Q. Firm...
A) Two firms operate as Cournot competitors. Inverse demand is P
= 120 - 2Q. Firm 1 has total cost function c(q1) = 10q1 and Firm 2
has total cost function c(q2) = 20q2. Solve for the Nash
equilibrium in quantities and determine the equilibrium price. B)
Now assume the rms are Bertrand competitors, simultaneously
choosing prices. Solve for the Nash equilibrium in prices and
determine the equilibrium quantities.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 2- You are a researcher studying the affect of happiness between office workers, students, and musicians....
- You have completed the Cash Flow statement. Pleased with your work so far, Barry asks you...
- java programing project Implement a program that computes the Fibonacci of a specified number, the factorial...
- Team Case #3: Rural Utility Your consulting team has been brought in by the Board chairperson...
- I have a question pertaining to ruby on rails. I was wondering if there is a...
- For the past two years, the United States has imposed tariffs (tax) on imports from China....
- Module 2 Course Work 1. Read Pages 12-30. 2. Use the week 1 video's and this...
ADVERTISEMENT