14.6. Let us ignore mixed strategies. Asahi and Kirin are the two largest sellers of beer in Japan. These two firms compete head to head in the dry beer category in Japan. The following table shows the profit (in millions of yen) that each firm earns when it charges different prices for its beer: Kirin ¥690 ¥630 180, 180 178, 184 175, 185 173, 186 ¥720 186, 173 194, 180 198, 190 196, 196 ¥660 184, 178 183, 183 182, 192 180, 194 185, 175 192, 182 191, 191 190, 198 ¥630 Asahi ¥660 ¥690 ¥720 a) Does Asahi have a dominant strategy? Does Kirin? b) Both Asahi and Kirin have a dominated strategy: Find and identify it. c) Assume that Asahi and Kirin will not play the dominated strategy you identified in part (b) (i.e., cross out the dominated strategy for each firm in the table). Having eliminated the dominated strategy, show that Asahi and Kirin now have another dominated strategy. d) Assume that Asahi and Kirin will not play the dominated strategy you identified in parts (b) and (c). Having eliminated this dominated strategy, determine whether Asahi and Kirin now have a dominant strategy. e) What is the Nash equilibrium in this game?

14.6. Let us ignore mixed strategies. Asahi and Kirin are the two largest sellers of beer in Japan. These two firms compete head to head in the dry beer category in Japan. The following table shows the profit (in millions of yen) that each firm earns when it charges different prices for its beer: Kirin ¥690 ¥630 180, 180 178, 184 175, 185 173, 186 ¥720 186, 173 194, 180 198, 190 196, 196 ¥660 184, 178 183, 183 182, 192 180, 194 185, 175 192, 182 191, 191 190, 198 ¥630 Asahi ¥660 ¥690 ¥720 a) Does Asahi have a dominant strategy? Does Kirin? b) Both Asahi and Kirin have a dominated strategy: Find and identify it. c) Assume that Asahi and Kirin will not play the dominated strategy you identified in part (b) (i.e., cross out the dominated strategy for each firm in the table). Having eliminated the dominated strategy, show that Asahi and Kirin now have another dominated strategy. d) Assume that Asahi and Kirin will not play the dominated strategy you identified in parts (b) and (c). Having eliminated this dominated strategy, determine whether Asahi and Kirin now have a dominant strategy. e) What is the Nash equilibrium in this game?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

PArt C D E last parts
12:22 3. Why do monopolistically competitive firms produce less than those operating at the most efficient scale of production? 기 + 7 (
12. Consider a duopoly market. Two firms are selling identical products and all costs are assumed to be zero for simplicity. Market demand schedule is given in the following table. Note that firms always choose an integer value for the quantity of production. Quantity Price Total Profit 3 $12 4 11 5 8 6 6. 7 4 8 2 1 10 a. Fill in the column of total profit.
Answer in step by step with explanation. Don't use Ai and chatgpt.
Ma3. You operate in a duopoly in which you and a rival must simultaneously decide what price to charge for the same homogeneous product. Assume each you and your rival can choose a “low price” or a “high price”. If you each charge a low price, you each earn zero profits. If you each charge a high price, you each earn profits of $3 million. If you charge different prices, the one charging the high price loses $5 million and the one charging the low price makes $5 million. What is the Nash equilibrium for the non-repeated version of this game? Now suppose the game is infinitely repeated. If the interest rate is 10%, can you do better than you could in the non-repeated version of this game? If your answer is “yes”, provide the players’ strategies and any other conditions that must hold.
Can you explain it simply and clearly, especially the formula? Productive and Allocative Efficiency of Monopolistic Competition Price = Minimum Average Total Cost Most of the monopolistic competitive firms cannot achieve productive efficiency since they sell a higher or bigger price than the minimum average cost, and it can actually cost a loss of money in their minimum ATC. In monopolistic competitive firms they can also use their excess capacity but they would only produce a quantity equal to their minimum ATC. Yet they Might not be able to sell that in the amount without lowering their prices. So it's either reducing their profits or incurring losses. In addition, monopolistic firms doesn't meet the allocative efficiency. They cannot achieve it because allocative efficiency requires that Price = Marginal Cost. The monopolistic firm shows a downward sloping demand curve which means to sell more unit they must lower the price of all the units. The firm maximize profits when…
Solve it correctly please. I will rate accordingly with 4votes.
5- 3- 1- 20 40 60 80 100 Q MR Using the above graph, This profit-maximizing firm will produce Blank 1 units. -MC What price will this profit-maximizing firm charge? $Blank 2 (Do NOT enter the '$' in your response. Enter only the whole dollar amount; do NOT enter cents.) If the industry was perfectly competitive instead of monopolistic, then market output would be Blank 3 units and market price would be $Blank 4. (Do NOT enter the '$' in your response. Enter only the whole dollar amount; do NOT enter cents.) Blank 1 Blank 2 Blank 3 Blank 4 Add your answer Add your answer Add your answer Add your answer
3. There are two chicken fried steak restaurants operating in a small west Texas town: Cow Tipper Café and Steak to the Heart Diner. Once a month they have to send their new menus to the printer when they have to decide on whether or not to charge a high price or a low price for a chicken fried steak dinner. Once their menus are printed, they can't change their pricing. Since the two restaurants use separate printing companies, each restaurant's pricing decision remains secret until the printed menus are delivered. The payoff matrix for the restaurants is below; the first entry in each cell is Cow Tipper Café's daily profit and the second entry is Steak to the Heart Diner's daily profit. Cow Tipper Café High Price Low Price Steak to the Heart Diner Low Price $350, $300 $450, $400 High Price $500, $350 $375, $475 a. What market structure do these two firms operate in? Explain your answer. b. If Steak to the Heart Diner chooses a high price, what pricing option is better for Cow Tipper…
Explain the difference in market power between perfectly competitive firms and monopolistically competitive firms. Which firms have more control over prices and/or output? Why? What are some industry examples of each type of market structure?
Answering all questions compulsory...
Its in the picture.