6. Using a payoff matrix to determine the equilibrium outcomeSuppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars)each company will earn, depending on whether it sets a high or low price for its tablets.Capturesque PricingHighLowHigh11, 112, 18Padmania PricingLow18, 210, 10For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, andCapturesque will earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizingfirms.If Padmania prices high, Capturesque will make more profit if it chooses a▼ price, and if Padmania prices low, Capturesque will make more profit ifit chooses aprice.If Capturesque prices high, Padmania will make more profit if it chooses aprice, and if Capturesque prices low, Padmania will make more profit ifit chooses aprice.Considering all of the information given, pricing higha dominant strategy for both Padmania and Capturesque.If the firms do not collude, what strategies will they end up choosing?O Padmania will choose a low price, and Capturesque will choose a high price.O Both Padmania and Capturesque will choose a high price.O Padmania will choose a high price, and Capturesque will choose a low price. For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, andCapturesque will earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizingfirms.If Padmania prices high, Capturesque will make more profit if it chooses aprice, and if Padmania prices low, Capturesque will make more profit ifit chooses a ▼ price.If Capturesque prices high, Padmania will make more profit if it chooses aprice, and if Capturesque prices low, Padmania will make more profit ifit chooses av price.Considering all of the information given, pricing highv a dominant strategy for both Padmania and Capturesque.If the firms do not collude, what strategies will they end up choosing?O Padmania will choose a low price, and Capturesque will choose a high price.O Both Padmania and Capturesque will choose a high price.O Padmania will choose a high price, and Capturesque will choose a low price.Both Padmania and Capturesque will choose a low price.True or False: The game between Padmania and Capturesque is not an example of the prisoners' dilemma.TrueO False

The supply function shows arranged reactions to contrasting level of cost. Assuming either the…

Capturesque Pricing High Low High 11, 11 2, 18 eing Low 18, 2 10, 10 ower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, and earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing s high, Capturesque will make more profit if it chooses a price, and if Padmania prices low, Capturesque will make more profit if price. ces high, Padmania will make more profit if it chooses a price, and if Capturesque prices low, Padmania will make more profit if price. the information given, pricing high a dominant strategy for both Padmania and Capturesque. : collude, what strategies will they end up choosing?

Capturesque Pricing High Low High 11, 11 2, 18 eing Low 18, 2 10, 10 ower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, and earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing s high, Capturesque will make more profit if it chooses a price, and if Padmania prices low, Capturesque will make more profit if price. ces high, Padmania will make more profit if it chooses a price, and if Capturesque prices low, Padmania will make more profit if price. the information given, pricing high a dominant strategy for both Padmania and Capturesque. : collude, what strategies will they end up choosing?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 9PA

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5. To advertise or not to advertise Suppose that Fizzo and Pop Hop are the only two firms that sell orange soda. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Рop Hop Advertise Doesn't Advertise Advertise 10, 10 18, 2 Fizzo Doesn't Advertise 2, 18 11, 11 For example, the upper right cell shows that if Fizzo advertises and Pop Hop doesn't advertise, Fizzo will make a profit of $18 million, and Pop Hop will make a profit of $2 million. Assume this is a simultaneous game and that Fizzo and Pop Hop are both profit-maximizing firms. If Fizzo decides to advertise, it will earn a profit of $ million if Pop Hop advertises and a profit of $ million if Pop Hop does not advertise. If Fizzo decides not to advertise, it will earn a profit of S million if Pop Hop advertises and a profit of $ million if Pop Hop does not advertise. If Pop Hop advertises, Fizzo makes a higher profit if it chooses If Pop Hop…
For example, the lower left cell of the matrix shows that if Full Coop advertises and Lucky Bird does not advertise, Full Coop will make a profit of $14 million, and Lucky Bird will make a profit of $3 million. Assume this is a simultaneous game and that Lucky Bird and Full Coop are both profit- maximizing firms. If Lucky Bird chooses to advertise, it will earn a profit of $ advertise. million if Full Coop advertises and a profit of $ million if Full Coop does not If Lucky Bird chooses not to advertise, it will earn a profit of $ not advertise. million if Full Coop advertises and a profit of $ million if Full Coop does S If Full Coop advertises, Lucky Bird makes a higher profit if it chooses If Full Coop doesn't advertise, Lucky Bird makes a higher profit if it chooses Suppose that both firms start off by deciding not to advertise. If the firms act independently, what strategies will they end up choosing? Both firms will choose not to advertise. O Lucky Bird will choose not to…
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Belge1 - Word eri Gözden Geçir Görünüm Yardım Ne yapmak istediğinizi söyleyin 1) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix ! FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 60. 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step); B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step); C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?:
. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its tablets. Capturesque Pricing High Low Padmania Pricing High 9, 9 3, 15 Low 15, 3 7, 7 For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $15 million, and Capturesque will earn a profit of $3 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing firms. If Padmania prices high, Capturesque will make more profit if it chooses a price, and if Padmania prices low, Capturesque will make more profit if it chooses a price. If Capturesque prices high, Padmania will make more profit if it chooses a price, and if Capturesque prices low, Padmania…
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fnan421 Word Gözden Geçir Görünüm Varam V Ne yapmak isted ginzi soyieyin 2) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix: FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 50, 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step)i B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step);
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