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Two major sellers Suzuki and Honda rule Pakistan's automobile market as the oligopolistic market. They jointly determine the price and output each firm would
Two major sellers Suzuki and Honda rule Pakistan's automobile market as the oligopolistic market. They jointly determine the price and output each firm would charge. However, if each firm constitutes its own self-interest they can maximizes their profit. Either of the company can produce one car, while the values in the matrix shows the profit for respective car. Use game theory to answer the questions. Honda Suzuki Accord City Alto 15,000 30,000 70,000 90,000 Celerio 50,000 35,000 102,000 83,000 a. Explain the game theory between Honda and Suzuki in the given context. 2 Marks b. If Suzuki wants to assemble Alto and Honda assembles City, how much profit will get? Honda 1 Mark c. If Honda wants to make Accord than Suzuki can make Alto or Celerio, which one is the best choice? 2 Marks 2 Mark d. With this perfect information, which car will respective company make and why?
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