Question durim and palester have merged to form dupal, Ask an Expert

Economics

Question: Durim and Palester have merged to form DuPal Fitness. They now have a monopoly over the fitness industry in Tirana and charge a rather high price. A fitness expert, Agon, is interested in opening a competing establishment. DuPal can compete by adjusting prices for memberships.

Agon's choices: Enter or stay out.

Dupal's choices: High price or low price.

Monthly profits (thousands):

A. Suppose Agon moves first and DuPal responds. Draw the game tree and find Nash Equilibrium using the payouts described in the profit table above.

B. Now assume DuPal knows that Agon might enter. Suppose DuPal moves first and Agon responds. Draw the game tree and find Nash Equilibrium using the payouts described in the profit table above.

C. Compare A and B above.

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92584962

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question an editorial in the economist magazine discusses

Question: An editorial in the Economist magazine discusses the fact that in most countries-including the United States-it is illegal for individuals to buy or sell body parts, such as kidneys. a. Draw a demand and supply ...

Qestion suppose that the demand for rough laborers is ld

Question: Suppose that the demand for rough laborers is L_D = 100 - 10W, where W = the wage in dollars per hour and L = the number of workers. If immigration increases the number of rough laborers hired from 50 to 60, by ...

Question effects of proportional income tax on labor supply

Question: Effects of Proportional Income Tax on Labor Supply . Suppose that the government imposes a proportional income tax on the consumer's wage income. That is, the consumer's wage income is (1 - t)w(h - l), where t ...

Question for each of the following absolute values of price

Question: For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would ...

Question - every year heather hosts a holiday party for her

Question - Every year, Heather hosts a holiday party for her friends. Her party budget is $200. Heater spends her budget on food platters that cost $25 each and on entertainment, which costs $50 per hour. a. Graph Heathe ...

Question there are two firms with the following marginal

Question: There are two firms with the following marginal abatement curves: MAC 1 (E 1 )=50-E 1 /4; MAC 2 (E 2 )=75-E 2 /2. Marginal damages as a function of total emissions is MD(E T )=E T /3. (a) Derive the aggregate M ...

Question you have been asked to calculate the current

Question: You have been asked to calculate the current balance on a loan that involves 5 equal mortgage payments of $200,000 per year (principal and interest), but the interest rate changed on the loan is variable. in ye ...

Question in the model of perfect competition all firms are

Question: In the model of perfect competition, all firms are price-takers since they treat price as a market-determined constant. Firm Perfcomp's total revenue function is TR(Q) = P.Q, in which P equals the output price. ...

Question a construction company is building an airport that

Question: A construction company is building an airport that would cost $500 million to build and cost nothing to maintain. The airport sets the price to maximize profit. A Table of the price and number of flights is giv ...

Question how were the interests of southern states

Question: How were the interests of Southern states addressed by the Three-Fifths Compromise and the lack of export taxes? What were the major points of the "Virginia Plan" at the Constitutional Convention? How did the " ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert