Review AaB b( AaB BbCcDc No SpacingHeading 1 1. Select one product from an indus

Question

Review AaB b( AaB BbCcDc No SpacingHeading 1 1. Select one product from an industry that has 2 or more different, but well- known brand names, and for which each brand name is available at 4 different locations. Be certain that for particular brand the size s of the product is the same because you will be comparing prices. They should be well-know products sold in drug, grocery, or department stores. Select the price of 2 different brands in the same industry at two different locations. Examples: headache remedies, toothpaste, instant coffee, laundry detergents, razors, etc. Size, quantity and other variables should be the same except for different brand. Product Brand Name Brand 2: price price Brand 1: Location1: Location2: rice price What are the factors responsible for the price differences? Packaging, design, brand names, etc? Are they colluding? Do you think it is hard to enter this industry? a. b. c. Give an example of a monopoly or close to a monopoly and describe its characteristics. Why is this product a monopoly? 2. Give an example that is close to perfect competition and describe its characteristics. Why this product is in a perfectly competitive industry? 3. 4. Nash Equilibrim Player 2 B3 A1 A2 A3 B1 5 113 B2 418 214 712 61 1 Circle the Nash equilibrium of this game

Explanation / Answer

1

a) Price difference usually arises due to differences in product design, brand names. Different brands produces slightly diffrentiated products .

b)No they are not colluding . Each brand serves different segments of customer and charges price different from other producers due to diffrentiated product.

c) Yes, it is hard to enter this industry because incumbent holds excess capacity or use predatory pricing to prevent entry by new firms.

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