We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Industrial Organization - Term Paper Example

Comments (0) Cite this document
Summary
(a) Since the information is symmetric, the buyer will only be willing to buy iff P is equivalent to their satisfaction ѲB, if the seller decides to sell he does it as long as the price is equal or greater than the satisfaction and otherwise remains with price p if he does not…
Download full paper
GRAB THE BEST PAPER
Industrial Organization
Read TextPreview

Extract of sample
Industrial Organization

Download file to see previous pages... The seller sets P˃ѲS, buyer holds its belief while the seller makes no sells if P˂ѲS.
(c) The buyer only buys at P˂ѲB but the seller is at take it or live and only willing to sell at P≥ѲS.so the expected utility of the buyer will be at only P≥U, thus the utility will be u=ѲB if he buys the product and 0 if he does not. As long the seller sets its price P≥ѲS, there would be no clearing price and no trade takes place between the two as the buyers are not willing to spend more.
(d) High prices reduces public demand hence little trade takes place between sellers and buyers {Tirole Jean, 1988}. In real life sellers actually set prices so as to compensate their production cost equivalent to MC and does not reduce it since they would make a loss.
(a) Probability of buying high quality=4/5 and the probability of buying low quality=1/5. Since the product quality are observable, the willingness to buy high quality is 4/5 while the willingness to buy low quality is 1/5.
(b) (i)As the firm provides warranty they incur extra cost of w. thus expected utilities becomes, for high quality ½[10×4/5+0]=4. Expected utility for low quality, ½[1/5×4+0]=0.4(Tirole & Jean, 1988). Since the expected utility for high quality is higher than the low quality and the information is unknown, consumers will go for higher quality foregoing the low quality. If low quality offers warranty they will make no sales thus their warranty is 0 while setting their price at c/PL=0.8=p.
(c) If firms cannot offer warranty and the consumers are rational, they will go for high quality products since information is believed to be asymmetric. Consumers will buy products that will last and sure will work.
(d) Profits of b is less than the profits of c. since consumers are assumed to be rational in c, there would be more sales as more high quality products would be sold as opposed to when the information is unknown in b.
(e) In case of two firms, a firm with higher warranty would make ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Industrial Organization Term Paper Example | Topics and Well Written Essays - 500 words - 2”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1629510-industrial-organization
(Industrial Organization Term Paper Example | Topics and Well Written Essays - 500 Words - 2)
https://studentshare.org/macro-microeconomics/1629510-industrial-organization.
“Industrial Organization Term Paper Example | Topics and Well Written Essays - 500 Words - 2”, n.d. https://studentshare.org/macro-microeconomics/1629510-industrial-organization.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Industrial development, globalization and multinational enterprises: new realities for developing countries
It has provided organizations with wider market and increased customer access. It has allowed nations to develop their economies, improve social standards, and transform their weaknesses into strengths. Today in the era of globalization and technological advancement; organizations belonging to various regions of the world depends on each other in getting the work done, they mutually handle operations and share the responsibility and accountability of the getting the work done.
14 Pages(3500 words)Term Paper
Organization Management
The opera trustees were considered to be the financial power of opera. The opera was more financially stable and flexible such as to expand or eliminate projects according to their will. However, the symphony was a much newer orchestra not having much flexibility.
3 Pages(750 words)Term Paper
The Organization System - Organizational Change and Stress Management
Change initiatives could fail if there is ‘repetitive change syndrome’ as suggested by Abrahamson (2004). There could be initiative overload which harms the organization’s capacity to handle change. This could occur when the employees are not aware of the effects of constant change in the organization. Sometimes people try to skip steps in order to expedite the change process.
6 Pages(1500 words)Term Paper
Industrial Revolution Paper
The majority of the reforms were seen to be changing the economic structure of the nation, converting it from one pivoted on agriculture to one concentrating instead on manufacturing. Naturally, this shift of focus of attention led to many cultural and social reforms along with economic ones, and it has been a debate for many years whether the benefits did indeed outweigh the harms of this revolution.
7 Pages(1750 words)Term Paper
Organization Theories
Organization Theories It deals with issues from the environment of an organization to its performance among other factors (Farazmand, 2002). This paper looks at how organizations can use the theories by using the example of DOL (The United States Department of Labor.
6 Pages(1500 words)Term Paper
Organizational/Industrial Psychology solving problems
Having branches in 12 states in America, our company has efficient, well trained and experienced personnel. Due to our good reputation in service delivery, the Toto’s Gourmet Pie and Coffee Shop has hired our services. Toto’s Gourmet Pie and coffee shop is a national chain of about 100 outlets that operates primarily on the west coast.
8 Pages(2000 words)Term Paper
Industrial safety engineering (safety in work enviroment)
Compared to other organizations, the engineering organizations take part in operations that are much riskier, putting them at the risk of accidents, diseases and even death. The industrial management team has a vital role to ensure that the health and safety of their employees are maintained at an optimal level.
10 Pages(2500 words)Term Paper
Industrial Organizational Psychology - Leadership and Group
He focused upon the fact that it was vital to be inspired by others for the followers to pursue new direction (University of Exeter, 2003). The notion of charismatic leadership is generally based upon the assumption that it is quite crucial to possess charm and grace
2 Pages(500 words)Term Paper
Industrial Organizational Theory and Development
In some cases, I work without considering which job is needed earlier that the others. Although I work hard, I realize that I am in a mess when the least urgent job is done while the most urgent has not been started and the deadline is
1 Pages(250 words)Term Paper
CAPITAL FOR A PROFIT ORGANIZATION
tuations, adequate capital is vital in commencing a business organization, boost operations during a financial crisis and payment of employees (Chakravorty, 2013). In the current developed world, various sources of capital exist hence providing an ideal environment for the
2 Pages(500 words)Term Paper
Let us find you another Term Paper on topic Industrial Organization for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us