Is that right? The U.S. producer Boeing, and the European Airbus are contemplati

Question

Is that right? The U.S. producer Boeing, and the European Airbus are contemplating the next generation mid-sized fuel efficient generation of air carrier. If both produce their respective models, then each would lose $50 million (because the world market is just not large enough to enable either to capture potential scale economies if they had to share the world market). If neither produce, then each one's net gain would of course be zero. If either one produces while the other does not, then the producer will gain $500 million. Answer questions 4-9 accordingly. 4) What is statement is correct regarding the strategies of each company? A) Do not produce. This is because if they both produce they will have a loss. B) Enter the market first. Then the other company knows that if it also enters, it will not be able to cover costs. C) If Airbus starts producing first, Boeing should not produce. Roth B and C are true.

Explanation / Answer

Yes. Correct Both (b) and (c) are right.

Because (a) cannot be correct as next generation jet will be needed and someone else will produce if they both don't.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.