The pie chart to the right illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is nothing%. (Enter your response as an integer.) The image is a pie chart labeled U.S. Automobile Industry Market Share. The pie chart shows the market share of the United States, Japan, Europe, and Korea in the U.S. automobile industry. The market share of the United States is 45%. The market share of Japan is 30%. The market share of Europe is 15%. The market share of Korea is 10%. U.S. Automobile Industry Market Share U.S. 45%Japanese 30%European 15%Korean 10%

The pie chart to the right illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is nothing%. (Enter your response as an integer.) The image is a pie chart labeled U.S. Automobile Industry Market Share. The pie chart shows the market share of the United States, Japan, Europe, and Korea in the U.S. automobile industry. The market share of the United States is 45%. The market share of Japan is 30%. The market share of Europe is 15%. The market share of Korea is 10%. U.S. Automobile Industry Market Share U.S. 45%Japanese 30%European 15%Korean 10%

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter13: best-practice Tactics: Game Theory

Section: Chapter Questions

Problem 1E

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In some industries, securing the adoption of an industry standard that is favourable to one’s own product is an enormous advantage. It can involve marketing efforts that grow more productive the larger the product’s market share. Microsoft’s Windows is an excellent example.2 The more customers adopt Windows, the more applications are introduced by independent software developers, and the more applications that are introduced the greater the chance for further adoptions. With other products the market can quickly exhibit diminishing returns to promotional expenditure, as it becomes saturated. However, with the adoption of new industry standards, or a new technology, increasing returns can persist.3 Microsoft is therefore willing to spend huge amounts on promotion and marketing to gain this advantage and dominate the industry. Many would claim that this is a restrictive practice, and that this has justified the recent anti-trust suit against the company. The competitive aspects of this…
Suppose that in the market for milk, market share is divided among six companies in the following manner:
In an industry with two firms, their best responses are ? ∗ 1 = 10 ― (1/6)?2 and ? ∗ 2 = 8 ― (1/6)?1. What is the total quantity exchanged on the market?
.A measure called Herfindahl-Hirschman Index is used to measure the degree of competition in an industry. The HHI is the square of each firm’s market share summed over the firms in the industry. (Where a market share is the percentage of sales in the market accounted for by that firm). For example, if an industry contains only three firms and their market shares are 60%, 25%, and 15% then the HHI (by squaring each firm’s share and summing them) is 4450. Some economists classify the market structures according to HHI scores. An HHI below 1,500 indicates a strongly competitive market, between 1,500 and 2,500 indicates a somewhat competitive market, and over 2,500 indicates an oligopoly. Given the information in the table, calculate the HHI in this industry. If yahoo and Bing were to merge, what would the HHI be? Google 67% Yahoo 18 Bing 11 Ask 3 AOL 1
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Two firms commercialize two products that they both compete for. Each firm currently has 50 % of the market share. As the two products have been recently improved, both firms are planning to launch an advertising campaign. If neither firm advertises, their market share remains the same. If one of them launches a more powerful advertising campaign, the other loses a proportional percentage of its customers. Market research indicates that it is feasible to reach 50 % of potential customers by TV, 30 % through the press and 20 % on the radio. a. Develop the payoff matrix b. Indicate the most appropriate advertising strategy for both firms c. Determine the game value