Please find the attached questions. Gino's is the only pizza restaurant in a commercial district. It makes $400 a day in revenue.Another pizzeria, Vito's, is considering entering the market. When facing the potential entryof Vito's pizzeria, Gino has two choices: to fight Vito's by selling pizza below its cost in thehope of preventing Vito's entry, or to accommodate Vito's. In the first case, Vito's wouldmake $200 and Gino's -- $100. In the second case, Vito's would make $300 and Gino's --$200. The normal form of the game is presented below.Gino's(Incumbent)AccommodateFightVito's (Potential Entrant)Enter200, 300100, 200Don't Enter400, 0400, 0a. Suppose both firms decide simultaneously and independently of each other. Find allNash equilibria of this game.b. Now, suppose that Vito's first decides whether to enter or not, and then Gino'smakes its choice after observing Vito's decision. Present the game in an extensiveform and find all Subgame Perfect Nash Equilibria (SPNE) of this sequential game.c. Will Vito enter the market? Is Gino's threat credible?

Given Pay off matrix Vito Enter Do not enter Gino Accommodate 200,300 400,0…

Gino's is the only pizza restaurant in a commercial district. It makes $400 a day in revenue. Another pizzeria, Vito's, is considering entering the market. When facing the potential entry of Vito's pizzeria, Gino has two choices: to fight Vito's by selling pizza below its cost in the hope of preventing Vito's entry, or to accommodate Vito's. In the first case, Vito's would make $200 and Gino's -- $100. In the second case, Vito's would make $300 and Gino's -- $200. The normal form of the game is presented below.

Gino's is the only pizza restaurant in a commercial district. It makes $400 a day in revenue. Another pizzeria, Vito's, is considering entering the market. When facing the potential entry of Vito's pizzeria, Gino has two choices: to fight Vito's by selling pizza below its cost in the hope of preventing Vito's entry, or to accommodate Vito's. In the first case, Vito's would make $200 and Gino's -- $100. In the second case, Vito's would make $300 and Gino's -- $200. The normal form of the game is presented below.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 9PA

See similar textbooks

Similar questions

The Tampa Tribune and the St. Petersburg Times compete for readers in the Tampa Bay market for newspapers. Recently, both newspapers considered changing the prices they charge for their Sunday editions. Suppose they considered the following payoff table for making a simultaneous decision to charge either a low price of $0.50 or a high price of $1.00. Tampa’s profits are shown in regular type. St. Petersburg’s profits are shown in bold. 5. This newspaper pricing decision ________ (is, is not) a Prisoners' Dilemma.
The following table presents the valuations that 5 different consumers have for 2 different products. The production costs are $10 per unit of good A and $10 per unit of good B. The firm producing them can choose to price them independently or using a bundling strategy. What is the profit the firm will realize, if it prices optimally? VALUATIONS Product A Product B Consumer 1 5 95 Consumer 2 10 90 Consumer 3 50 50 Consumer 4 80 20 Consumer 5 95 5 ANSWER SHOULD BE 410. I will like if it is right! showing my support. Thank you.
Suppose Tasty Cakes is deciding its pricing strategy: it is debating whether to offer a single linear price for its sheet cakes or to offer non-linear pricing. Suppose on any day, it gets 2 customers–who are of Type A and TypeB with the following maximum willingness-to-pay for the cakes: Units Type A Type B 1 $100 $90 2 $75 $40 Suppose it costs $10 to bake each of the cakes. (a) If Tasty Cakes decides to pick a linear pricing strategy, what will be the profit-maximizing price it should choose? How many cakes will it end up selling and what will be its total profit? (b) If Tasty Cakes decides to pick a non-linear pricing strategy where it may offer a different price depending on the number of cakes purchased, what should be the profit-maximizing set of prices? How many cakes will it sell and what will be its total profit? (c)Comparing Tasty Cakes’profits in (a) and (b), explain IN WORDS why we see this difference in profits
1. Tying as a Bundling Strategy Ginnie's Gym Refreshment Bar Hydration Power Drink Satisfying Smoothie Early 7.00 5.00 Late 6.00 10.00 Ginnie has observed that her signature item, the Satisfying Smoothie, is very popular with the late evening crowd at the gym, but it is not so popular with the early crowd. The early and late crowds have only slightly different preferences for her Hydration Power Drink. The gym has a very large clientele, and Ginnie can’t always tell who has the late-crowd preference and who has the early-crowd preference. In her graduate MBA class, they have been studying tying as a bundling strategy. Ginnie asked her professor, “Would bundling work for my business?” Her professor said, “I think you told me that the marginal costs for you two products differ significantly, so first, I would recommend that you look at the contribution margin for each. Sometimes, low prices may be more profitable and sometimes high prices…
E1
Apple is unusual because it has both a legitimate Philippine online store | as well as brick-and-mortar distributors with prices being about the same. In your opinion, what kind of market would shop online and what kind would prefer to shop in their actual stores?
It takes 3,000 households having average annual income of $50,000 within a 3-mile radius to support a grocerystore. There are actually 6,000 households within 3-miles of the Shop-Rite Grocery that have $50,000 per yearaverage incomes. Today, Shop-Rite is the only grocery store in this area. Using the concept of Nash Equilibrium inlocation, explain what the likely outcome will be for this area, given those conditions
Macmillan Learning You notice that the prices of coffee at your local supermarket vary from week to week, causing you to buy different brands, depending on which is cheaper that week. Your friend William, by contrast, is a hardcore Peet's fan and buys only Peet's, whether the price is $5.99 per pound or $12.99 per pound. By varying coffee prices, the supermarket sells both to you, who is relatively price particular about coffee, and to William, who is relatively price and and particular about coffee. O sensitive; less; insensitive; more insensitive; more; sensitive; less sensitive; more; insensitive; less insensitive; less; sensitive; more Incorrect
Save Answer Consider two cigarette companies, PM Inc. and Brown Inc. If neither company advertises, the two companies spit the market and earn $60 million each. If they both advertise, they again split the market, but profits are lower by $20 million since each company must bear the cost of advertisirlg. Yet if one company advertises while the other does not, the one that advertises attracts customers from the other. In this case, the company that advertises earns $70 million while the company that does not advertise earns only $30 million. What will these two companies do if they behave as individual profit maximizers? Neither company will advertise, and PM Inc. earns $60. One company will advertise, the other will not. Brown Inc. earns $70. Both companies will advertise, and PM Inc. earns $40. Both companies will advertise, and PM Inc. earns $60.
2. China Eastern Airlines (MU) and Air China (CA) are two domestic carriers operating the route between Beijing and Shanghai. MU intends to initiate a discount on the ticket price from 1000 RMB to 800 RMB, in order to increase the sales in Spring Festival Holiday. Meanwhile, MU is informed that CA would do the same. Both MU and CA have two options, either reduce the price or keep the original price, resulting in four outcomes marked from 1. to 4. in Table 1. The payoffs at each outcome are also provided in Table 2 for MU and CA. Each player prefers the outcome with higher payoffs. Please find out which one of the four outcomes is most likely to happen by giving detailed steps for calculation. Table 2 Options and Payoffs for MU and CA CA Original Price | 1. (30, 60) 3. (60, 90) Discount 2. (-70, 80) 4. (-10, -10) MU Original Price 1Discount 40 OM
Consider a town in which only two residents, Eric and Ginny, own wells that produce water safe for drinking. Eric and Ginny can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Note: the second picture of the last blank has 4 option A. nash equilibrium B tying c resale price maintenance D predatory pricing
As the new general manager of the Grand Palladium Jamaica luxury all-inclusive resort, youare assessing your pricing policies. Currently, the price of a weekend stay is $2,000 perguest. You estimate the marginal cost of serving a guest at $1,600, and while yourpredecessor unfortunately did not leave you data from the pricing experiments and testmarketing she performed, you do know that such experiments were done, and that yourpredecessor was competent.a. What is your best estimate of the elasticity of demand for a weekend stay at the GrandPalladium?b. Your learned that at the current price, the resort is only 80% full on the weekends.Remembering the sense of belonging that you experienced in a crowded subway duringthe rush hour, you contemplate lowering the price so the resort is completely full. What isyour back-of-the-envelope calculation for how much you need to lower the price?c. After some thought you cooled to the idea of full occupancy. Instead, you focused yourenergy and…