14. (Figure: Payoff Matrix for Alex and Sybil) Use Figure: Payoff Matrix for Alex and Sybil. Alex and Sybil are the only producers of frozen yogurt in their town. Every week, each decides whether to price high or low for the following week. The figure shows the profit per week earned by the two businesses. Suppose the firms each decide to price high initially and adopt a Grim Trigger strategy for the following weeks. After a few weeks, Alex's weekly profit would be Payoff Matrix for Alex and Sybil and Sybil's weekly profit would be Alex charges a high price Alex earns $1,000 per week Sybil earns $1000 per week Alex earns $200 per week Sybil earns $1,500 per week Sybil charges a high price Sybil charges a low price a. $800; $800 b. $1,000; $1,000 c. $1,500; $200 d. $200; $1,500 Alex charges a low price Alex earns $1,500 per week Sybil earns $200 per week Alex earns $800 per week Sybil earns $800 per week

14. (Figure: Payoff Matrix for Alex and Sybil) Use Figure: Payoff Matrix for Alex and Sybil. Alex and Sybil are the only producers of frozen yogurt in their town. Every week, each decides whether to price high or low for the following week. The figure shows the profit per week earned by the two businesses. Suppose the firms each decide to price high initially and adopt a Grim Trigger strategy for the following weeks. After a few weeks, Alex's weekly profit would be Payoff Matrix for Alex and Sybil and Sybil's weekly profit would be Alex charges a high price Alex earns $1,000 per week Sybil earns $1000 per week Alex earns $200 per week Sybil earns $1,500 per week Sybil charges a high price Sybil charges a low price a. $800; $800 b. $1,000; $1,000 c. $1,500; $200 d. $200; $1,500 Alex charges a low price Alex earns $1,500 per week Sybil earns $200 per week Alex earns $800 per week Sybil earns $800 per week

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(Figure: Oligopoly Pricing Strategy in Wireless TV Market II) Use Figure: Oligopoly Pricing Strategy in Wireless TV Market II. The noncooperative equilibrium in the cable TV market occurs when: Next Wireless Supreme Wireless High price Low price High price Next Wireless earns $100,000 Supreme Wireless earns $100,000 Next Wireless earns $80,000 Supreme Wireless earns $130,000 Low price Next Wireless earns $130,000 Supreme Wireless earns $80,000 Next Wireless earns $90,000 Supreme Wireless earns $90,000 O Next Wireless sets a high price and earns $80,000, and Supreme Wireless sets a low price and earns $130,000. O both firms set a high price, and each earns $100,000. K O Next Wireless sets a low price and earns $130,000, and Supreme Wireless sets a high price and earns $80,000. O both firms set a low price, and each earns $90,000.
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