A towns two gas stations are each considering lowering prices to attract more sales. How this affects
Question:
A town’s two gas stations are each considering lowering prices to attract more sales. How this affects the profits for each gas station depends on whether the other station also lowers prices. The decision matrix in Figure 9Q-3 shows the payoffs, depending on what each player decides to do. Suppose both gas stations lower their prices, and they find themselves in the worst-case scenario in which both have also lowered their profits. Now suppose gas station A announces in an advertisement that it is committed to keeping the new low prices. Why would gas station A do this? What outcome would you expect?
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Gas station Adoes not announce its commitment to low prices becau...View the full answer
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Anurag Agrawal
I am a highly enthusiastic person who likes to explain concepts in simplified language. Be it in my job role as a manager of 4 people or when I used to take classes for specially able kids at our university. I did this continuously for 3 years and my god, that was so fulfilling. Sometimes I've skipped my own classes just to teach these kids and help them get their fair share of opportunities, which they would have missed out on. This was the key driver for me during that time. But since I've joined my job I wasn't able to make time for my passion of teaching due to hectic schedules. But now I've made a commitment to teach for at least an hour a day.
I am highly proficient in school level math and science and reasonably good for college level. In addition to this I am especially interested in courses related to finance and economics. In quest to learn I recently gave the CFA level 1 in Dec 19, hopefully I'll clear it. Finger's crossed :)