CS608 MIDTERM SOLVED PAPERS BY MOAAZ
Both surrendering they get a lower result than they would get by remaining quiet. So reasonable, the self-intrigued play brings about every detainee being more awful off than if they had kept quiet.
A detainee’s quandary circumstance for oligopolistic firms emerges when at least 2 firms by endeavoring autonomously to pick the best technique expectation of anything that the others are probably going to do, all end up in a more terrible situation than if they had participated in any case.
Result of a lattice for firm X& Y (benefit in Rs: at various costs) X’s value Rs.2 Rs.1.80 Rs.2 A. 10m every B. 5m for Y 12m for X Y’s value Rs.1.80 C. 12m for Y 5m for X D. 8m each
There are four focuses to be noted in this table: • If both X and Y firms charge the same cost of Rs.2 then they get the same benefit of Rs.10 million as shown by choice A.
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• If both firms autonomously pondered decreasing the cost to Rs.1.8 then they need to consider the choice of another firm. Do they need to contemplate what their adversary will do? Their adversary can complete two things either to bring down the cost or kept a similar cost level.
Presently assuming X saved his cost at Rs.2 the most horrendously awful thing for X would be that its adversary Y reduces its cost to Rs.1.8. X’s benefit will currently tumble to Rs.5 million and Y’s benefit will increment to Rs.12 million because of lower cost.
This is displayed in choice C. • If notwithstanding, X reduces its cost to Rs.1.8 the most horrendously terrible result actually would be Y to reduce its value too to Rs.1.8. in any case, this time X’s benefit will just tumble to Rs.8 million and Y’s benefit will likewise tumble to Rs.8 million. This is displayed in choice D. • However on the off chance that X thinks hopefully and reduces its cost to Rs.1.
8 with his hopeful supposition that Y will leave with its cost at Rs.2. on the off chance that X is solidly in his presumption, he will acquire the most extreme benefit of Rs.12 million and Y will procure Rs.5 million. This choice is displayed in choice B.
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