Mitchell Electronics Produces a Home Video Game That Has Become

question 11

Essay

Mitchell Electronics produces a home video game that has become very popular with children.Mitchell's managers have reason to believe that Wright Televideo Company is considering entering the market with a competing product.Mitchell must decide whether to set a high price to accommodate entry or a low,entry-deterring price.The payoff matrix below shows the profit outcome for each company under the alternative price and entry strategies.Mitchell's profit is entered before the comma,and Wright's is after the comma. a.Does Mitchell have a dominant strategy? Explain.
b.Does Wright have a dominant strategy? Explain.
c.Mitchell's managers have vaguely suggested a willingness to lower price in order to deter entry.Is this threat credible in light of the payoff matrix above?
d.If the threat is not credible,what changes in the payoff matrix would be necessary to make the threat credible? What business strategies could Mitchell use to alter the payoff matrix so that the threat is credible?

Describe the role and concept of the Independent (Third) Sector in the economy.

Understand Karl Marx's theory of alienation in the context of industrial and postindustrial economies.

Illustrate examples of socialism within a predominantly capitalist society like the United States.

Comprehend the social and economic impacts of the Industrial Revolution beyond the workplace.

---

Definitions:

Consignment

An arrangement in which goods are left in the possession of another party to sell, but the consignor retains ownership until the goods are sold.

Net Realizable Value

The estimated selling price of an asset in the ordinary course of business minus any costs of completion, transportation, and necessary selling expenses.

Direct Costs of Disposal

The expenses directly linked to the process of disposing of an asset, including sales fees and legal costs.

Decreasing Costs

A situation where the expenses of producing a good or service fall over time, typically due to efficiency improvements or economies of scale.