Reference no: EM1373190
McDonald's and Burger King are situated on different corners of a downtown intersection. Burger King and McDonald's compete on the basis of the values they set for their burger, fry, and soda mixture meals. Every Monday, Burger King and McDonald's simultaneously choose their combo meal prices, which will remain in effect for the rest of the week.
Burger King and McDonald's consider only two possible prices: a low price of $3.50 or a high price of $4.50 for their combination meals. The weekly profit from each of the four possible combinations of decisions is given in the following table:
Burger King's price
Low ($3.50) High ($4.50)
McDonald's
price Low ($3.50) A $3,000, $5,500 B $6,500, $5,000
High ($4.50) C $2,000, $9,000 D $5,000, $8,000
Payoffs in dollars of weekly profit.
Explain the statements below.
[A] The pricing decision facing Burger King and McDonald's is a prisoners' dilemma.
[B] Cooperation between Burger King and McDonald's occurs in cell D of the payoff table. The non-cooperative outcome occurs in cell A.
[C] Cell B represents cheating by McDonald's, while cell C represents cheating by Burger King.
[D] If Burger King and McDonald's make their pricing decision just one time, they will likely end up in cell A.
[E] Burger King can credibly threaten to punish McDonald's with a retaliatory price cut.
[F] McDonald's can credibly threaten to punish Burger King with a retaliatory price cut.
|
Effects of increase or decrease in number of competitors
: According to the computer industry what are positive and negative effects of either a sudden increase or decrease in the number of competitors on prices in long run.
|
|
Describe knowledge management and prepare a presentation
: Prepare a powerpoint slides that describe knowledge management and what this description means within an organisation, as well as the three issues - Develop notes for each PowerPoint slide.
|
|
Determine traditional human development index
: Assume a country has a life expectancy of 51.5, an adult literarcy rate of 62.6 percent, a combined gross enrollement ratio of 45 percent, and GDP per capita PPP of $853.
|
|
Evaluation of 360-degree performance
: Many companies at present use 360-degree performance evaluations. Make a case for this type of evaluation based on the informativeness principle.
|
|
Making decision in oligopoly markets
: McDonald's and Burger King are situated on different corners of a downtown intersection. Burger King and McDonald's compete on the basis of the values they set for their burger, fry, and soda mixture meals.
|
|
Effects of trade barriers
: Could a nation's production possibilities curve shift outward? Describe what such a shift would mean, and discuss at least two events that might reasone such a shift to occur.
|
|
Reducing gender and racial discrimination in communities
: if you were a consultant to a community that is planning a comprehensive program to reduce racial and gender discrimination
|
|
Replacement of stocks in a portfolio
: A shareholder has a $10,000 portfolio that is allocated as follows; short 100 shares of stock A, purchase 250 shares of B and 200 shares of 3. Any additional funds are borrowed at risk free rate of 0.04.
|
|
Find expected return on the security
: The average stock market return in twentieth century has been 9 percent. Suppose a security whose average return has been 7%, and whose beta is estimated at 0.5.
|