Ford and General Motors Are Considering Expanding into the Vietnamese

question 63

Essay

Ford and General Motors are considering expanding into the Vietnamese automobile market. Devise a simple prisoners' dilemma game to demonstrate the strategic considerations that are relevant to this decision.

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Definitions:

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumer income.

Inferior Good

A type of good whose demand decreases when consumers' income increases, opposite to normal goods.

Demand Elastic

A measure of how sensitive the quantity demanded of a good or service is to a change in its price.

Supply Inelastic

A situation where the quantity supplied of a good is not significantly affected by changes in its price.