High Price | Low Price X= $625 X = $725 Firm Y Low Price High Price Y = $625 Y = $475 X = $475 X = $400 Y = $725 Y = $400 Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. The structure of the payoffs suggests that Multiple Choice both firms have a dominant strategy. there is no Nash equilibrium. if this is a repeated game, firms will maximize long-run profits by alternating high and low prices. there are first-mover advantages if this is a sequential game.

High Price | Low Price X= $625 X = $725 Firm Y Low Price High Price Y = $625 Y = $475 X = $475 X = $400 Y = $725 Y = $400 Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. The structure of the payoffs suggests that Multiple Choice both firms have a dominant strategy. there is no Nash equilibrium. if this is a repeated game, firms will maximize long-run profits by alternating high and low prices. there are first-mover advantages if this is a sequential 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

Firm Y Low Price High Price Firm X High Price Low Price X = $625 X = $725 Y = $625 Y = $475 X = $475 X = $400 Y = $725 Y = $400 Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. If this is a simultaneous game where the firms compete and seek the highest possible profits, the most likely profit is Multiple Choice O $475,000 for firm X and $725,000 for firm Y. $400,000 for firm X and $400,000 for firm Y. $625,000 for firm X and $625,000 for firm Y. Help $725,000 for firm X and $475,000 for firm Y.
Extensive Form, Multistage Game: Firm A currently monopolizes its market and earns profits of $10M. Firm B is a potential entrant that is thinking about entering the market. If B does not enter the market, it earns profits of $0, while A continues to earn profits of $10M. If B enters, then A must choose between accommodating entry and fighting it. If A accommodates, the A earns $5M and B earns $5M. If A fights, both lose $5M. Draw the game in extensive form and predict the outcome. Again, EXTEND the above game. Now, suppose the decision of B to enter is reversible in the following way. After B enters the market, and A has decided to either fight or accommodate, B can choose to remain in the market or exit. All payoffs from the above game remain the same. However, if B decides to exit the market, then B suffers a loss of $1 M, while A regains the old profit of $10M. Draw the game in extensive form and predict the outcome.
Firm Y Low Price High Price Firm X High Price Low Price X = $725 X = $625 Y = $625 Y = $475 X = $475 X = $400 Y = $725 Y = $400 Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. If this is a sequential game and Y moves first, the most likely profit is Multiple Choice $625,000 for firm X and $625,000 for firm Y. $725,000 for firm X and $475,000 for firm Y.
Consider a market with two firms, Target and Wal-Mart, that sell CDs in their music department. Both stores must choose whether to charge a high price ($30) or a low price (s13) for the new Miley Cyrus CD. These price strategies with corresponding profits are depicted in the payoff matrix to the right. Target's profits are in red and Wal-Mart's are in blue. Target Target's dominant strategy is to pick a price of S Price = $30 Price = $13 $7,000 $2.500 Price = $30 S7,000 $15,000 Wal - Mart $15.000 $5,000 Price = $13 $2,500 $5,000 Wal-Mart's dominant strategy is to pick a price of $ The new equilibrium market wage will be and the new equilibrium market employment level will be higher unchanged lower higher lower unchanged
2. Consider the two-by-two bimatrix game listed below: Left Right (2,-2) (1,-1) Up Down (3,-3) (-1,1) where the player "Row" chooses the action "up" or "down" and the player "Column" chooses the action "left" or "right". Describe a mixed strategy Nash Equilibrium for this game.
q13-
6
Determine which strategies are dominated in the following normal-form games. 2 2 1 L C R 1 L R U 5,9 0.1 4,3 A 3,3 2,0 Σ 3,2 0,9 1,1 B 4,1 8,-1 D 2.8 0,1 8,4 (b) (a) 2 1 W X Y N 2 L R U 3,6 4,10 5,0 0,8 U 1,1 0,0 M 2,6 3,3 4,10 1,1 Ꭰ 0,0 5,5 D 1,5 2,9 3,0 4,6 (c) (d)
This is a 2-part question that requires the answer before in order to answer the next one. Thank you for your time.
None
Q17
Three firms share a market. The demand function is P(q1, 92, 93) = 10 – q1 – 92 – 93, where q; is the output of firm i, Player i. The marginal cost per unit for each firm is zero. Suppose firm 1 is a market leader, and that firm 2, and firm 3 choose q2 and q3 simultaneously after observing q1 Find the SPE of this game. How much is produced by firm 2? Numerical answer How much is produced by firm 1, 2, and 3?