Question
Ford invites Clarion to set up a plant at Ford’s industrial complex in Brazil, where Clarion will build navigation systems for installation in the Ford cars produced there. If Clarion builds the plant, it would have no buyers for the plant’s output

Question
In the Venezuela–ExxonMobil Holdup Problem in Figure, suppose that the parties could initially agree to a binding contract that Venezuela would pay ExxonMobil x dollars if it nationalizes the oil fields. How large does x have to be for ExxonMobil to invest

Question
In Q& A 13.3, suppose that A = 12 but that profits under the current wage and high output are 14 for Firm 1 and 11 for Firm 2. Which wage would Firm 1 choose?

Subject
business-economics

Question
Use a game tree to illustrate why an aircraft manufacturer may price below the current marginal cost in the short run if it has a steep learning curve.

Subject
business-economics

Question
Before entry, the incumbent earns a monopoly profit of ?m = $ 10 (million). If entry occurs, the incumbent and rival each earn the duopoly profit, ?d = $ 3. Suppose that the incumbent can induce the government to require all firms

Question
A monopoly manufacturing plant currently uses many workers to pack its product into boxes. It can replace these workers with an expensive set of robotic arms. Although the robotic arms raise the monopoly’s fixed cost substantially, they lower its marginal cost because

Question
Walmart has a reputation for using a variety of legal means to prevent unionization of its stores by frustrating union organizers (Lichtenstein, 2008). Why would it make sense for Walmart to spend more trying to deter unionization at a given store than

Question
Xavier and Ying are partners in a course project. Xavier is the project leader and is the first to decide how many hours, x, to put into the project. After observing the amount of time that Xavier contributes, Ying decides how many

Question
An incumbent can commit to producing a large quantity of output before the potential rival decides whether to enter. The incumbent chooses whether to commit to produce a small quantity, qi, or a large quantity. The rival then decides whether to enter.

Question
The more an incumbent firm produces in the first period, the lower its marginal cost in the second period. If a potential rival expects the incumbent to produce a large quantity in the second period, it does not enter. Draw a game