the san options whên settir the morning: set either high or low prices. Because their products (gasoline) are nearly identical, the following revenue outcor possible: (i) each station chooses high prices and each station makes $150.00, (ii) each station chooses low prices and each sta makes $75.00, or (iii) when one gas station chooses high prices and the other chooses low prices, the high-priced gas station m $65.00 and the low-priced gas station makes $95.00. Where these gas stations differ, however, is in how much it costs to set prices each morning. Gas station 1 has a digital price dis it costs $4.00 to update prices each morning. Gas station 2 has to manually change its prices each morning, and it costs $12.00 Assume that (i) these costs are always paid each morning even if the station is not changing prices from the previous day, and (i are no other costs. Use the above information to generate the payoff (profit) values in the table below. In each cell, payoffs should be structured as Station 1, Gas Station 2).

the san options whên settir the morning: set either high or low prices. Because their products (gasoline) are nearly identical, the following revenue outcor possible: (i) each station chooses high prices and each station makes $150.00, (ii) each station chooses low prices and each sta makes $75.00, or (iii) when one gas station chooses high prices and the other chooses low prices, the high-priced gas station m $65.00 and the low-priced gas station makes $95.00. Where these gas stations differ, however, is in how much it costs to set prices each morning. Gas station 1 has a digital price dis it costs $4.00 to update prices each morning. Gas station 2 has to manually change its prices each morning, and it costs $12.00 Assume that (i) these costs are always paid each morning even if the station is not changing prices from the previous day, and (i are no other costs. Use the above information to generate the payoff (profit) values in the table below. In each cell, payoffs should be structured as Station 1, Gas Station 2).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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