1-A monopolist can charge any price they like for their product and it will sell

by Caaltu · May 20, 2024

1-A monopolist can charge any price they like for their product and it will sell. use the example of “Rihanna” in your response
Evaluate the above statement. Is it true? If so, how do you know? Is the above statement false? If so, why? In your answer, be sure to also explain what a monopolist is (what are the defining characteristics, etc). provide an incorrect response
In your answer, please provide any relevant economic explanation (you may describe a graph or explain using concepts we have covered in the lecture modules). An excellent answer generally requires several sentences.
2-Coca Cola and Pepsi are two large soft drink companies. Combined, these companies control a large market share in the soft drink industry. Both companies currently advertise their sodas on television, and each company earns a profit of $550 million. If both companies were to stop advertising on television, each would earn a profit of $600 million. If only one company were to stop advertising on television and the other company continued to do so, the company that stopped advertising would earn a profit of $200 million and the company that continued to advertise would earn a profit of $800 million. Assume this is a simultaneous-move game where Coca Cola and Pepsi choose to advertise or choose not to advertise, and Coca Cola and Pepsi cannot collude.
What is a payoff matrix? Explain this concept in your own words and explain why it is used in game theory.
Does Coca Cola have a dominant strategy? If so, how did you find this strategy? (In other words, write a short description about your process of verifying this dominant strategy). In your response be sure to define a dominant strategy in your own words.