Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 15, Problem 9APA
(a)
To determine
Identify the structure of the energy-drink market.
(b)
To determine
Identify the dominance of two firms in the energy market.
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1. Tom Jackson has been running a successful steakhouse that specializes in serving
upscale steak dinners. His current marketing campaign targets residential
households. Recently, it was announced that a new conference hotel was to open
near his steakhouse, bringing in many potential business customers. Speculation
followed that Morton's steakhouse-an upscale steakhouse chain currently marketing
to business customers nationallywas considering opening one of its restaurants near
the new hotel and would therefore compete with Tom's restaurant. In light of the
potential threat from Morton's, Tom began considering the possibility of making a
significant investment to change his marketing campaign and target businesses
rather than households. In doing so, he estimated the following profit outcomes (in
thousands of dollars) resulting from the strategies that he and Mortons might
implement:
Morton's
Marketing Target
Enter
Don't Enter
-$200, -850
$50, $100 $105, $0
Businesses
$90, $0
Тоm…
At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg's was quoted as saying,
for the past several years, our individual company growth has come out of the other fellow's hide." Kellogg's has been producing
cereal since 1906 and continues to implement strategies that make it a leader in the cereal industry. Suppose that when Kellogg's and
its largest rival advertise, each company earns $1 billion in profits. When neither company advertises, each company earns profits of
$9 billion.
If one company advertises and the other does not, the company that advertises earns $49 billion and the company that does not
advertise loses $4 billion. For what range of interest rates could these firms use trigger strategies to support the collusive level of
advertising?
Instruction: Enter your response as a percentage rounded to the nearest whole number.
percent
9. Suppose Warner Music and Universal Music are in a duopoly and currently limit themselves to 10 new artists per year. One artist sells 2 million songs at $1.25 per song. However, each label is capable of signing 20 artists per year. If one label increases the number of artists to 20 and the other stays the same, the price per song drops to $0.75, and each artist sells 3 million songs. If both labels increase the number of artists to 20, the price per song drops to $0.30, and each artist sells 4 million songs.
Explain how revenue payoffs for each scenario are calculated.
If this game is played once, how many artists will each producer sign, and what will be the price of a song?
If this game is played every year, how many artists will each producer sign, and what will be the price of a song?
Chapter 15 Solutions
Macroeconomics
Ch. 15.1 - Prob. 1RQCh. 15.1 - Prob. 2RQCh. 15.1 - Prob. 3RQCh. 15.1 - Prob. 4RQCh. 15.2 - Prob. 1RQCh. 15.2 - Prob. 2RQCh. 15.2 - Prob. 3RQCh. 15.2 - Prob. 4RQCh. 15.2 - Prob. 5RQCh. 15.2 - Prob. 6RQ
Ch. 15.3 - Prob. 1RQCh. 15.3 - Prob. 2RQCh. 15.4 - Prob. 1RQCh. 15.4 - Prob. 2RQCh. 15.4 - Prob. 3RQCh. 15.4 - Prob. 4RQCh. 15.4 - Prob. 5RQCh. 15 - Prob. 1SPACh. 15 - Prob. 2SPACh. 15 - Prob. 3SPACh. 15 - Prob. 4SPACh. 15 - Prob. 5SPACh. 15 - Prob. 6SPACh. 15 - Prob. 7SPACh. 15 - Prob. 8SPACh. 15 - Prob. 9APACh. 15 - Prob. 10APACh. 15 - Prob. 11APACh. 15 - Prob. 12APACh. 15 - Prob. 13APACh. 15 - Prob. 14APACh. 15 - Prob. 15APACh. 15 - Prob. 16APACh. 15 - Prob. 17APACh. 15 - Prob. 18APACh. 15 - Prob. 19APACh. 15 - Prob. 20APACh. 15 - Prob. 21APACh. 15 - Prob. 22APACh. 15 - Prob. 23APA
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