Pictech PricingHighLowHigh8, 84, 13Flashfone PricingLow13, 47,7For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $13 million, and Pictech willearn a profit of $4 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms.If Flashfone prices high, Pictech will make more profit if it chooses av price, and if Flashfone prices low, Pictech will make more profit if it choosesprice.price, and if Pictech prices low, Flashfone will make more profit if it choosesIf Pictech prices high, Flashfone will make more profit if it chooses aprice.a dominant strategy for both Flashfone and Pictech.Considering all of the information given, pricing lowIf the firms do not collude, what strategies will they end up choosing?O Flashfone will choose a high price, and Pictech will choose a low price.O Both Flashfone and Pictech will choose a high price.O Both Flashfone and Pictech will choose a low price.O Flashfone will choose a low price, and Pictech will choose a high price. If the firms do not collude, what strategies will they end up choosing?Flashfone will choose a high price, and Pictech will choose a low price.O Both Flashfone and Pictech will choose a high price.O Both Flashfone and Pictech will choose a low price.O Flashfone will choose a low price, and Pictech will choose a high price.True or False: The game between Flashfone and Pictech is not an example of the prisoners' dilemma.TrueO False

The game theory is the investigation of the manners by which communicating decisions of monetary…

For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $13 million, and Pictech will earn a profit of $4 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a v price, and if Flashfone prices low, Pictech will make more profit if it chooses price. If Pictech prices high, Flashfone will make more profit if it chooses a price, and if Pictech prices low, Flashfone will make more profit if it chooses price. Considering all of the information given, pricing low v a dominant strategy for both Flashfone and Pictech. If the firms do not collude, what strategies will they end up choosing? O Flashfone will choose a high price, and Pictech will choose a low price.

For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $13 million, and Pictech will earn a profit of $4 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a v price, and if Flashfone prices low, Pictech will make more profit if it chooses price. If Pictech prices high, Flashfone will make more profit if it chooses a price, and if Pictech prices low, Flashfone will make more profit if it chooses price. Considering all of the information given, pricing low v a dominant strategy for both Flashfone and Pictech. If the firms do not collude, what strategies will they end up choosing? O Flashfone will choose a high price, and Pictech will choose a low price.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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aepioymentld=598281800483229979995799&elSBN=9780357133606&id%3D1061548135&snapshotld%32200166& 6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low High 11, 11 2, 15 Flashfone Pricing Low 15, 2 8, 8 For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $15 million, and Pictech will earn a profit of $2 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a price, and if Flashfone prices low, Pictech will make more profit if it chooses ▼ price. a If Pictech prices high, Flashfone will make more profit if it chooses a price, and…
O Cell A O Cell C O Cell E O Cell I None of the above
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A secluded off-ramp on a highway through the Prairie of Prax has two gas stations, the only gas stations for miles, Northgoings and Southgoings. Suppose Northgoings and Southgoings must simultaneously display their prices, choosing between a high price and low price gas. The payoff matrix for this game, showing potential daily profit, is displayed below. Assume both stations know all of the information in the matrix, and that this is a one-time payoff. Northgoings Decisions High Price Low Price N: $500 N: $800 High Price S: $400 S: $50 Southgoings Decisions N: $100 N: $250 Low Price S: $700 S: $200 (a) According to our model of game theory, Northgoings has a dominant strategy to [Select] (b) According to our model of game theory, Southlgoings has a dominant strategy to [ Select] V (c) According to our model of game theory, the competitive outcome, or Nash Equilibrium, Northgoings will earn [ Select] and Southgoings will earn [ Select] (d) On the other hand, if these two companies…