Equilibria than continuous pricing, Managerial Economics

Assignment Help:

Two firms are engaged in Bertrand competition. Both firms have a stable marginal cost of €7. Presently, every firm is allocated half the market. There are 10,000 people in the population and every of them are willing to pay at most €12 for one unit of the good. Further, consumers can Only purchase one unit of the good and it costs every of them ? to switch from one firm to another. Suppose that there is perfect information in this market, which means that customers know what prices are being charged. Law or custom restricts the firms to charging whole amounts (e.g., they can charge €8, but not €8.50).

a) Suppose that switching costs are zero. What are the Nash equilibria of this model? Why does discrete pricing result in more equilibria than continuous pricing?

 


Related Discussions:- Equilibria than continuous pricing

Strategic reasons - reason for protection, Strategic Reasons For politi...

Strategic Reasons For political or strategic reasons, a country may not wish to be dependent upon imports and so may protect a home industry even if it is inefficient.  Many co

Case let 2, 1.Is Indian companies running a risk by not giving attention to...

1.Is Indian companies running a risk by not giving attention to cost cutting?

Theories of the firm, Define Williamson''s Model of Managerial Discretion p...

Define Williamson''s Model of Managerial Discretion practice?

What statistical method used to estimate economic variable, Statistical tec...

Statistical technique used to estimate economic variable Some statistical techniques are used to estimate economic variables of interest to a manager. In a number of cases, sta

Utility, Utility Utility is the amount of satisfaction derived from th...

Utility Utility is the amount of satisfaction derived from the consumption of a commodity or service at a particular time.  Utility is not inherent but a psychological satisfa

Gatt & wto, introduction, evaluation,principle, activities concept behind G...

introduction, evaluation,principle, activities concept behind Gatt & wto

Marris modal, plz help tomorrow is my paper n I need help to understand thi...

plz help tomorrow is my paper n I need help to understand this topic

Describe the public utility monopoly, Q. Describe the Public Utility Monopo...

Q. Describe the Public Utility Monopoly? Public Utility Monopoly:   Governmental authorities seize complete management and control of some utilities to protect social interest

Presentation, to give presentation on the topic: shutdown and abandoned cos...

to give presentation on the topic: shutdown and abandoned cost analysis?

Foreign exchange markets, Foreign Exchange Markets It is the place whe...

Foreign Exchange Markets It is the place where buyers and sellers meet to negotiate the exchange of different currencies e.g. forex bureaus. Exchange Rates These are

Write Your Message!

Captcha
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