Monopolist is facing threat of entry by another firm

Assignment Help Business Economics
Reference no: EM131174410

A monopolist is facing a threat of entry by another firm. First the entrant decides whether or not to enter, and then the incumbent decides whether or not to cut its price (fight) in response. If the entrant decides to stay out, it gets a payoff of 0 and the incumbent gets a payoff of 10 as a monopolist. If the entrant decides to enter the market, two firms’ payoff depends on whether the incumbent fights or not. If the incumbent fights, then both firms end up with a negative payoff -5. If the incumbent decides not to fight, they divide the market profit and both get a payoff of 5. Draw the extensive form of the game and solve the backward induction outcome

Reference no: EM131174410

Questions Cloud

How might a change of consciousness of thinking change : "The Earth does not belong to us, we belong to the Earth." What do you think this means? How might a change of consciousness to this way of thinking change the way we treat the Earth and its creatures?
Determine the normal discharge for an aluminum rain : Determine the normal discharge for an aluminum rain spout with the shape shown in Fig. 14.19 that runs at the depth of 3.50 in. Use n = 0.013. The spout falls 4 in over a length of 60 ft.
Write a paper assignment from the given case study : Analyze the data, determine attack rates, and perform the statistical calculations necessary to find and association with disease and determine a likely source of the outbreak.
Find an evaluation study : Find an evaluation study from http://usableweb.com or one of your own choice. Please answer the questions and submit via the Assignment Link- you may use Zip format for submission. Instructions:
Monopolist is facing threat of entry by another firm : A monopolist is facing a threat of entry by another firm. First the entrant decides whether or not to enter, and then the incumbent decides whether or not to cut its price (fight) in response. If the entrant decides to stay out, it gets a payoff of 0..
Why is a ready investigative kit so important and valuable : Why is a "ready" investigative kit so important and valuable to accident preparedness? There are several interviewing tips; which, in your opinion, is the most important?
Describe the problem facing the organization : Discuss the impact of this issue on the well-being of their employees. What are the potential ramifications if the organization doesn't correct this issue?
Calculate the normal discharge when the culvert runs : A circular culvert under a highway is 6 ft in diameter and is made of corrugated metal. It drops 1 ft over a length of 500 ft. Calculate the normal discharge when the culvert runs half full
Evaluate the impact of fraud detection on an organization : ACC 691 Final Project Guidelines. In this assignment, you will demonstrate your mastery of the following course outcomes: Evaluate the impact of fraud detection on an organization and Evaluate internal controls for their role in maintaining reliabil..

Reviews

Write a Review

Business Economics Questions & Answers

  Using the expectations theory of the term structure

Suppose the Fed announced that they planned to keep short run interest rates low for a period of two years. This year, the 1 year USTS zero coupon bond interest rate is i = 0.0025 and next year the interest rate on a 1 year zero Coupon bond is expect..

  Do you think pornography is harmful to american society

Our Discussion for this week will focus on prostitution and pornography. Please respond to the following questions/statements: Do you think pornography is harmful to American society? Do you think that pornography should be restricted in the United S..

  Q firms like papa johns pizza hut as well as dominos sell

q. firms like papa johns pizza hut as well as dominos sell pizza and other products that are differentiated in nature.

  What is the slope of the budget constraint

Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. Assume that the price of good x is $5 and the price of good y is $10 when income is $200 per time period, p..

  An individual likes owning cars is better

An individual likes owning cars is better. In order to own a car, an individual must have a 1:4 ratio of frames to tires.

  About the student loan

A student loan totals $18,000 a graduation. The interest rate is 6%, and there will be 60 payments beginning 1 month after graduation. If this student received $1,500 as a graduation present and uses it to pay off an extra $1500 in the first month, w..

  After two quaters of increasing levels of production

After two quaters of increasing levels of production, the CEO of Canadian Fabrication and Design was upset to learn that, during this time of expansion, productivity of the newly hired sheet metal workers declined with each new worker hired. Explain ..

  Government purchases

Use these data to calculate the following:a.Private saving b.Public saving c.Government purchases

  Opportunities presented by the internal operating structure

Analyze opportunities presented by the internal operating structure while creating innovative methods of achieving and maintaining financial stability for CVS Health and McKesson pharmaceutical companies

  How risk sharing impacts production possibilities curve

Depict two separate production possibilities curves and clearly label which one represents the quadrant 2 scenario and which one represents the quadrant 3 scenario. Explain how risk sharing impacts the production possibilities curve you drew and ulti..

  Why are entrepreneurs willing to supply goods and serices

Why are entrepreneurs willing to supply goods and serices for consumers at attractive price -  Is it because they care personally about the consumers?

  Firm purchases labor in a competitive domestic labor market

Suppose a firm purchases labor in a competitive domestic labor market and sells its product in a competitive international product market that covers the whole world. Domestic producers represent a small portion of the world market and have no influe..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd