Suppose the Daily Demand for Coke and Pepsi in a Small

question 36

Multiple Choice

Suppose the daily demand for Coke and Pepsi in a small city are given by Q_C = 90 - 100P_C + 400(P_P - P_C) and Q_P = 90 - 100P_P + 400(P_C - P_P) ,where Q_C and Q_P are the number of cans Coke and Pepsi sell,respectively,in thousands per day.P_C and P_P are the prices of a can of Coke and Pepsi,respectively,measured in dollars.The marginal cost is $0.45 per can for both Coke and Pepsi.What is the Nash equilibrium price for Coke?

• A) $0.016
• B) $0.45
• C) $0.53
• D) $0.38

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Definitions:

Expert Power

A form of power derived from possessing specialized knowledge or expertise that others value.

Referent Power

The ability to control another’s behavior because of the individual’s desire to identify with the power source.

Bathsheba Syndrome

Ethical failure amongst leaders, characterized by a sense of invulnerability that leads to poor personal decisions and misconduct.

Intoxicating

Having a substantial and often negative or overwhelming impact on mental or emotional state, typically related to substances but can also apply to experiences.