Question
In: Economics
Suppose that three firms are deciding whether to enter a market or not and each is...
Suppose that three firms are deciding whether to enter a market or not and each is interested in its proÖt minus entry costs. Call these firms A,B,C. If only one firm enters, suppose its profit is 500; if two enter it is 200 for each and if all three enter, it is 140 for each. The entry costs for A,B,C are respectively 80, 120 and 150. Firms simultaneously decide whether to enter or not enter (a firm that does not enter gets a payoff of 0). What are the Nash equilibria (there could be more than one) of this game in pure strategies?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Question 5 Two firms are deciding whether or not to enter a market. Their payoffs are...
Question 5 Two firms are deciding whether or not to enter a
market. Their payoffs are as follows: • If both firms enter the
market, Firm A gets $100 million and Firm B gets $75 million. • If
neither firm enters, Firm A gets $130 million and Firm B gets $125.
• If Firm A enters and Firm B doesn’t, Firm A gets $70 million and
Firm B gets $0. • If Firm B enters and Firm A doesn’t, Firm...
1. Irene’s Dairy is deciding whether or not to enter the market for ice cream, currently...
1.
Irene’s Dairy is deciding whether or not to enter the market for
ice cream, currently monopolized by Mattie’s Ice-cream. If it
enters the market, Mattie’s can either accommodate him and share
his 10million in profits equally with Irene or fight him and cause
a 5million loss for each in a price war.
If Mattie wants to discourage Irene from entering the market,
what strategy should she follow?
a.
Threaten to always accommodate
b.
Always accommodate
c.
Threaten to...
Suppose Firms A and B sell competing products and are deciding whether to undertake advertising campaigns....
Suppose Firms A and B sell competing products
and are deciding whether to undertake advertising campaigns. Each
firm will be affected by its competitor’s decision. Table 13.1
provides the pay-off matrix:
table 13.1
firm B-advertise
firm B - don't advertise
firm A-advertise
10, 5
15, 0
firm A - don't advertise
6, 8
10, 2
A Please transform this game in normal form into a game in
extensive Form, and then try to find the equilibrium. Assume that
firm A...
Two towns, each with three members are deciding whether to put on a fireworks display to...
Two towns, each with three members are deciding whether to put
on a fireworks display to celebrate the New Year. Fireworks cost
$360. In each town, some people enjoy fireworks more than
others.
a.In the town of Bayport, each of the residents value the public
good as follows:Frank$50Joe$100Caline $300Would fireworks pass a
cost-benefit analysis?
Explain.
b.The mayor of Bayport proposes to decide by majority rule and ,
if the fireworks referendum passes, to split the cost equally among
all the...
Two towns, each with three members, are deciding whether to put on a fireworks display to...
Two towns, each with three members, are deciding whether to put
on a fireworks display to celebrate the New Year. Fireworks cost
$360. In each town, some people enjoy fireworks more than
others.
In the town of Bayport, each of the residents values the public
good as follows:
Resident
Value
(Dollars)
Tim
50
Alyssa
100
Brian
300
The total benefit of the fireworks display to the town of
Bayport is _________
.
Therefore, fireworks ______ pass the cost-benefit analysis in...
Suppose the home firm is considering whether to enter the foreign market. Assume that the home...
Suppose the home firm is considering whether to enter the
foreign market. Assume
that the home firm has the following costs and demand:
Fixed costs = $400
Marginal costs = $13 per unit
Local price = $25
Local quantity = 20
Export price = $26
Export quantity = 20
a. What is the firm’s average cost from selling only in the
local market?
b. Calculate the firm’s profit from selling (i) just to Home’s
market; (ii) to both markets.
c....
Taco-bell and Rio wrap are competing in the MI market. Each firm is deciding whether to...
Taco-bell and Rio wrap are competing in the MI market. Each firm
is deciding whether to follow a high spending advertising strategy.
More aggressive advertising would lead high spending on media and
billboard advertising. The profits associated with each strategy
are as follows:
Taco-bell
Rio-Wrap
Aggressive
Passive
Aggressive
100, 90
150, 50
Passive
60, 130
120, 110
a) Does either firm have a dominant strategy? If yes, what is
the dominant strategy for each firm?
b) Does either firm have...
Taco-bell and Rio wrap are competing in the MI market. Each firm is deciding whether to...
Taco-bell and Rio wrap are competing in the MI market. Each firm
is deciding whether to follow a high spending advertising strategy.
More aggressive advertising would lead high spending on media and
billboard advertising. The profits associated with each strategy
are as follows:
Taco-bell
Rio-Wrap
Aggressive
Passive
Aggressive
100, 90
150, 50
Passive
60, 130
120, 110
a) Does either firm have a dominant strategy? If yes, what is
the dominant strategy for each firm?
b) Does either firm have...
Suppose the market for smartphones in Australia is oligopolistic with three firms owning the entire market:...
Suppose the market for smartphones in Australia is oligopolistic
with three firms owning the entire market: Apple, Samsung and
Google.
(a) Suppose all the products are unbranded (homogeneous) and all
three firms have similar cost functions. What would be the best
outcome for consumers in this market and what is the best outcome
for the three oligopolists? Which one is the efficient outcome?
(b) Suppose Apple can differentiate its smartphone by using a
different operating system than the other two...
Question 5：Suppose the home firm is considering whether to enter the foreign market. assume that the...
Question 5：Suppose the home firm is considering whether to enter
the foreign market. assume that the home firm has the following
costs and demand
Fixed costs=S100
Marginal costs=$15 per unit
Local price=$30
Local quantity=40
Export price= $25
Export quantity= 20
Calculate the firm's total costs from selling only in the local
market.
What is the firm's average cost from selling only in the local
market？
Calculate the firm's profit from selling only in the local
market
Should the Home firm...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
- Explain an example in which a variable has two different addresses at different places in a...
- Hadley, a thirty-five-year-old physician, has worked at Princeton Plainsboro Hospital for six years. She recently received...
- QUESTION 1. For each of the following, state whether the occurrence of the variable x occurs...
- According to Mike Taft of RVK, the “Markets Group” is an important unit of the Federal...
ADVERTISEMENT