Business, 16.06.2020 23:57 tiwaribianca475

To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Dairy King
Advertise Doesn't Advertise
Creamland Advertise 10,10 18, 2
Doesn't Advertise 2,18 11,11

For example, the upper right cell shows that if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $18 million, and Dairy King will make a profit of $2 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms.

a. If Creamland decides to advertise, it will earn a profit of $ million if Dairy King advertises and a profit of $ million if Dairy King not advertise.
b. If Creamland decides not to advertise, it will earn a profit of million if Dairy King advertises and a profit of $ million if Dairy King does not advertise.

Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing?

a. Creamland will choose not to advertise and Dairy King will choose to advertise.
b. Both firms will choose not to advertise.
c. Both firms will choose to advertise.
d. Creamland will choose to advertise and Dairy King will choose not to advertise.

Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing?

a. Both firms will choose to advertise.
b. Both firms will choose not to advertise.
c. Creamland will choose to advertise and Dairy King will choose not to advertise.
d. Creamland will choose not to advertise and Dairy King will choose to advertise.

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 19:30

What is the most important factor that affects the value of a company? a) cash flow b) earnings c) supply and demand d) number of employees

Answers: 1

Answer

Business, 22.06.2019 01:50

You are an employee of an u.s. firm that produces personal computers in thailand and then exports them to the united states and other countries for sale. the personal computers were originally produced in thailand to take advantage of relatively low labor costs and a skilled workforce. other possible locations considered at that time were malaysia and hong kong. the u.s. government decides to impose punitive 100% ad valorem tariffs on imports of computers from thailand to punish the country for administrative trade barriers that restrict u.s. exports to thailand. how do you think your firm should respond? what does this tell you about the use of targeted trade barriers?

Answers: 3

Answer

Business, 22.06.2019 19:10

Pam is a low-risk careful driver and fran is a high-risk aggressive driver. to reveal their driver types, an auto-insurance company a. refuses to insure high-risk drivers b. charges a higher premium to owners of newer cars than to owners of older cars c. offers policies that enable drivers to reveal their private information d. uses a pooling equilibrium e. requires drivers to categorize themselves as high-risk or low-risk on the application form

Answers: 3

Answer

Business, 22.06.2019 20:20

Which statement is not true about a peptide bond? which statement is not true about a peptide bond? the peptide bond has partial double-bond character. the carbonyl oxygen and the amide hydrogen are most often in a trans configuration with respect to one another. rotation is restricted about the peptide bond. the peptide bond is longer than the typical carbon-nitrogen bond.

Answers: 2

Answer

You know the right answer?

To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that s...

Questions