What could firm a do to make the threat credible

Reference no: EM13224871

Firm B

Enter Don't Enter

Low Price (3,21) (3,1)

Firm A High Price (4,5) (6,3)

Show how the payoff matrix in the table for Problem 10 might change if firm A were to make a credible threat to lower the price by building excess capacity to deter frim B from entering the market.

(a) indicate the best strategy for each firm.

(b) Why is the entry-deterrent threat by firm A to lower the price not credible to firm B?

Reference no: EM13224871

Questions Cloud

How much heat is absorbed sample of water when it is heated : How much heat is absorbed by a 125g sample of water when it is heated from 25.200C to 32.800C? The specific heat of water is 4.184 J/g0C.

Should the airline replace its night flight from la : overnight is $1200 and would be zero in L.A. The airline is contemplating eliminating the ngiht flight out of L.A. and replacing it with a morning flight. The estimated number of passengers is 70 in the morning flight and 50 in the return afternoo..

Explain how the study contributes to knowledge : Explain how the study contributes to knowledge in the field and what new knowledge is provided?

Explain the observations listed were made on different solns : The observations listed were made on different solns. Given the observations state which ion studied in this experiment is present. If the test is not definitive, indicate that with a (?).

What could firm a do to make the threat credible : Show how the payoff matrix in the table for Problem 10 might change if firm A were to make a credible threat to lower the price by building excess capacity to deter frim B from entering the market. (a) indicate the best strategy for each firm.

Define what fraction of piperazine : What fraction of piperazine (perhydro-1,4-diazine) is in each of its three forms (H2A, HA-, A2-) at pH 8.26?

What are the ordering and holding costs : A hotel purchases 18,000 gallons of a cleaning product per year. Each gallon costs $10 and the cost of holding one gallon for a day is estimated to be $0.50. Ordering cost amounts to $30 per order.

Explain the emission of a higher frequency of light : Which would involve the emission of a higher frequency of light, the transition of an electron in an H atom from the n = 5 to the n = 3 level or a similar transition in an X atom?

Explain how do the spacings of the energy levels of x : How do the spacings of the energy levels of X and H compare, where X has one electron like the H atom but has different energy levels and for X: E = - (RH / n3) and RH is the same as H (2.179 ×10?18J)?

User Account

All Pages