ECONOMICS FOR BUSINESS DECISIONS - Essay Example

This step will open the doors of new ecommerce marketplaces as well as improve the market efficiency of the company. Disintermediation – The utilization of ecommerce marketplaces and elimination of intermediary elements of the preexisting value chain is disintermediation and disintermediation offers reduced sales as well as procurement costs for company as well as costumers (Booz, Allen 6). It also speeds up the whole process. CPC is now well established company and has a good value in B2B ecommerce marketplaces.

Since, it has figured out and implemented all the necessary steps that are discovered by Booz-Allen during their research this company now has achieved great value parameters. But now the company has the challenge to sustain its value in coming time and for maintain its current value CPC should have to continuously work on its online visibility and its online ecommerce platform. While analyzing the website of the company we can say that CPC should pay some more attention to its website and discover new marketplaces.

It will definitely increase its value. So, there are always the chances that a company can increase its current value. a) Suppose you are in this situation only once. You and your competitor have to announce your individual outputs at the same time. You expect your competitor to choose the Nash equilibrium strategy. How much will you choose to produce and what is your expected profit? Because there exists a symmetry (for own as well as competitor’s firm), in equilibrium condition both the outputs will exhibit same value.

Hence we can substitute Qj with Qi* (James Brickley, Clifford Smith, Jerold Zimmerman 9-8). Combined output = 40 (given) hence tag price = 20 and profit = 400, for both of the firms. The analysis given here reveals that we should choose to produce 20 entities given that our competitor is following Nash