Why is pepsi’s reaction function so flat

Assignment Help Econometrics

Reference no: EM131254067

Consider the Coke and Pepsi example discussed in the chapter.

a) Explain why each firm's reaction function slopes upward. That is, why does Coke's profit-maximizing price go up the higher is Pepsi's price? Why does Pepsi's profit-maximizing price go up the higher Coke's price is?

b) Explain why Pepsi's profit-maximizing price seems to be relatively insensitive to Coke's price. That is, why is Pepsi's reaction function so flat?

Reference no: EM131254067

Questions Cloud

Examples of an internal failure cost : What criterion is used to classify a failure cost as internal versus external? Give three examples of an internal failure cost and three examples of an external failure cost.

Balanced scorecard of performance measures : Identify four categories of measures that might constitute a Balanced Scorecard of performance measures and provide an example of each. Also explain how a Balanced Scorecard could assist your organization. This answer must be in your own words-sig..

Prepare a data disk and backup disk for the problem solving : Prepare a data disk and a backup disk for the problem-solving exercises and other computer-based assignments.

Relevant remote access applications : (1) Research the different types of VPNs and other relevant remote access applications (2) Discuss what they are and some common techniques used to try and subvert their security.

Why is pepsi’s reaction function so flat : Explain why Pepsi's profit-maximizing price seems to be relatively insensitive to Coke's price. That is, why is Pepsi's reaction function so flat?

Develop a table listing five popular internet sites : Using a database or spreadsheet program, develop a table listing five popular Internet sites for a job search. - The table should include columns on any costs of using the site.

Advantage of nosql databases : In this forum, describe your current organization or school (industry, size, processes, etc...) and discuss whether/how it could take advantage of NOSQL databases.

Sort the table according to annual salaries from high to low : Sort the table according to annual salaries from high to low and print the resulting table. Sort the table from the most liked to least liked and print the results.

Domain registration information and dns records : Research one of these domains: microsoft.com, cnn.com, icann.org, wikipedia.org, google.com. Your goal is to find out publicly available information about each domain including domain registration information and DNS records.

User Account

All Pages