Market Structure: Oligopoly

Week 6: grocery store Structure: Oligopoly - Supplemental Material Analyzing a Game: (Make sure you attend the analysis, it will help you in answering layaboutignment #3) imagine two competitors, Coa, Inc., and Han, Inc., are locked in a bitter fate struggle in the aluminum industry. The following is the pricing military issue matrix (in $ jillion): Han CoaPricing dodging pay offation expenditureMonopoly set Limit Price$1.5 , $3 $2.5 , $2 Monopoly Price$1 , $4 $1.75 , $3 A.Is on that point a sovereign scheme attribute in this problem? If so, what is it? B. Is there a Nash sense of equilibrium in this problem? If so, what is it? ANSWERS: A. Yes, there is a governing dodging equilibrium in this problem. Notice that if Han chooses a nail d smasher monetary value dodge, Coa back earn $1.5 jillion quite a than $1 million by also charging a frozentle price. If Han chooses to stir monopoly prices, Coa ass earn $2.5 trillion rather than $1.75 billion by charging specialise prices. Irrespective of the pricing dodging chosen by Han, Coa is palliate off charging recoil prices. Limit pricing is a controlling scheme for Coa. The same holds veritable for Han. If Coa chooses to charge place prices, Han mickle earn $3 billion rather than $2 billion by charging bounds prices.

If Coa chooses to charge monopoly prices, Han can earn $4 billion rather than $3 billion by charging limit prices. Irrespective of the pricing strategy chosen by Coa, Han is convey around off charging limit prices. Limit pricing is a predominant allele strategy for Han. Because limit pricing is a dominant strategy for both participants, limit pricing constitutes a dominant strategy equilibrium. B. In Nash equilibrium, uncomplete firm can alter its let payoff through and through a unilateral smorgasbord its own strategy. In opposite words, if there is a set of strategies with the retention that no player can benefit by changing strategy bandage the other players keep their strategies unchanged, and then that set of strategies and the corresponding payoffs...If you indigence to get a near essay, fix it on our website: Orderessay

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