Determine the optimal strategy for firm

Reference no: EM1372790

Figure 10-13 demonstrate the payoff matrix for the only 2-auto dealerships in a community, Jim's Autos and Tim's Autos. The matrix demonstrate the profits that each company would earn from selecting either a low price or a high price.

JIM'S AUCTIONS
LOW PRICE HIGH PRICE
LOW PRICE TIM'S PROFIT 100,000 TIM'S PROFIT 250,000
JIM'S PROFIT 100,000 JIM'S PROFIT -50,000
TIM'S AUCTIONS
HIGH PRICE TIM'S PROFIT -50,000 TIM'S PROFIT 200,000
JIM'S PROFIT 250,000 JIM'S PROFIT 200,000

a.The dealers set their prices independently. What is dominant strategy for each dealer? Determine the optimal strategy for each firm. What is the optimal pay-off for each dealer? Explain briefly.
b. If the dealers were to merge and both dealers were managed as a single business, how would this affect its pricing strategy? Explain.

Reference no: EM1372790

Questions Cloud

Create application that uses two-dimensional arrays : Create the application that uses 2-dimensional arrays to keep track of 5 students' grades, with each student having 3 different classes. You require to ask user to enter grade for each of 5 students.

What is the rotational kinetic energy of rotating wheel : A typical ten-pound car wheel has a moment of inertia of about. The wheel rotates about the axle at a constant angular speed making 60 full revolutions in a time interval of 5.

What direction did marks car go after the collision : Mark and Clark are identical twins at the amusement park riding on the bumper cars. Both boys have the same mass, 85kg. The cars are identical with a mass of 120 kg.

Facets of psychosocial growth and expression : Describe the various facets of psychosocial growth and expression taking place in school-aged children, and recognize environmental factors that influence such growth and expression.

Determine the optimal strategy for firm : Figure 10-13 demonstrate the payoff matrix for the only 2-auto dealerships in a community, Jim's Autos and Tim's Autos. The matrix demonstrate the profits that each company would earn from selecting either a low price or a high price.

Show the horizontal distance : If the airplane somehow continues to fly as if nothing had happened, where is engine relative to the airplane at the moment the engine hits ground.

Implement client and server programs on bank atm application : Implement client and server programs on bank ATM application. Give error checking if amount is legal and userID/password (created in the 1st time).

Imigration and globalization in united states : Describe the social and economic issues that commonly motivate immigration to the U.S. from Mexico and other parts of Latin America? Describe some of the problems/concerns faced by Latin American immigrants settling in the United States (for examp..

Determine the range of the projectile : A projectile is shot from the edge of a cliff h = 105 m above ground level with an initial speed of v0 = 135 m/s at an angle of 37.0Â ° with the horizontal.

User Account

All Pages