Suppose that the pricing strategies for FiberOne and of Starlink are shown in the table below. They have to decide whether to charge a high or low price for their internet service. The four pairs of payoff values show what each company expects to earn or lose in millions of dollars, depending on what the other company does. FiberOne’s Price Strategy Starlink’s Price Strategy High Price Low Price High Price Starlink+$200 FiberOne +$200 Starlink+$500 FiberOne - $100 Low Price Starlink-$100 FiberOne + 500 Starlink+$100 FiberOne +$100 If it’s expected that the incomes of people living in rural Nigeria is expected to increase, what will the equilibrium outcome be, ceteris paribus? a) a) Starlink will charge a low price; FiberOne will charge a high price. b) b) Starlink will charge a high price; FiberOne will charge a low price. c) c) Both Starlink and FiberOne will charge a low price. d) d) Both Starlink and FiberOne will charge a high price.
Suppose that the pricing strategies for FiberOne and of Starlink are shown in the table below. They
have to decide whether to charge a high or low
values show what each company expects to earn or lose in millions of dollars, depending on what the
other company does.
FiberOne’s Price Strategy
Starlink’s
Price
Strategy
High Price Low Price
High Price Starlink+$200 FiberOne +$200 Starlink+$500 FiberOne - $100
Low Price Starlink-$100 FiberOne + 500 Starlink+$100 FiberOne +$100
If it’s expected that the incomes of people living in rural Nigeria is expected to increase, what will the
equilibrium outcome be, ceteris paribus?
a) a) Starlink will charge a low price; FiberOne will charge a high price.
b) b) Starlink will charge a high price; FiberOne will charge a low price.
c) c) Both Starlink and FiberOne will charge a low price.
d) d) Both Starlink and FiberOne will charge a high price.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
