subject
Business, 14.04.2020 22:18 365371

Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price:

Big Brew
High Price Low Price
Little Kona Enter $2 million, $3 million
Little Kona Don't Enter ($0,$7)millions ($0,$2)millions

a. Does either player in this game have a dominant strategy?
b. Does your answer to part (a) help you figure out what the other player should do? What is the Nash equilibrium? Is there only one?
c. Big Brew threatens Little Kona by saying, "If you enter, we're going to set a low price, so you had better stay out." Do you think Little Kona should believe the threat? Why or why not?
d. If the two firms could collude and agree on how to split the total profits, what outcome would they pick?

ansver
Answers: 2

Other questions on the subject: Business

image
Business, 22.06.2019 00:30, ummmmmmmmmmmm
What are six resources for you decide which type of business to start and how to start it?
Answers: 3
image
Business, 22.06.2019 13:50, chammusa2
Which one of the following statements is true? ddt does not prevent disease from passing from agricultural animals to humans. cost was a major factor in the united states government's decision to ban ddt. many african governments concluded that the potential long-term health effects of ddt were not as serious as the immediate problem of insect control. ddt cannot accumulate in the fat of animals. the ddt ban in the united states has made it very difficult to control agricultural insect pests.
Answers: 3
image
Business, 22.06.2019 19:00, chrisroman152
20. to add body to a hearty broth, you may use a. onions. b. pasta. c. cheese. d. water.
Answers: 2
image
Business, 22.06.2019 22:00, meramera50
Only the united states has embassies. true or false
Answers: 2
You know the right answer?
Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. E...

Questions in other subjects:

Konu
Physics, 20.10.2020 02:01
Konu
Mathematics, 20.10.2020 02:01
Konu
History, 20.10.2020 02:01