Tanzanite is one of the world's rarest gemstones, said to only be found in Tanzania. Assume...

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Tanzanite is one of the world's rarest gemstones, said to only be found in Tanzania. Assume GemT and Rares are the only 2 firms in the world selling Tanzanite gemstones. Hence, they both hold large market shares in the market for Tanzanite. Answer the following questions: a. GemT and Rares noticed sales for gemstones are higher when they are newly launched. They decided to sell their gemstones at a higher price during the first 3 months when they are just released. This is an example of price discrimination. Type F for First Degree, S for Second Degree, T for Third Degree or P for Peak Load Pricing. b. As a new year is approaching, GemT and Rares are deciding whether to launch a new collection of Tanzanite gemstones. Launching a new collection will bring in higher revenue but will also incur large marketing and design costs. GemT's payoff will also be will be affected by Rares" decision to launch a new collection and vice versa. The payoff values (in millions of dollars) below represent the expected first-year economic profits from each strategy. What will be the resulting first-year payoff be for GemT (the left player) after playing the game if Rares is the top row player? $ Answer in millions of dollars (i.e. a value shown in the table, with no decimal places, $ sign, spaces or commas). Launch Does not launch c. What is the dominant strategy for Rares? Launch 17, 25 0,79 Does not launch 79,5 27, 17 Type L for Launch, X for Does not launch or N for No dominant strategy. d. If GemT and Rares are able to communicate and collaborate, would they be able to achieve a collectively better outcome? Type Y for Yes or N for No. Tanzanite is one of the world's rarest gemstones, said to only be found in Tanzania. Assume GemT and Rares are the only 2 firms in the world selling Tanzanite gemstones. Hence, they both hold large market shares in the market for Tanzanite. Answer the following questions: a. GemT and Rares noticed sales for gemstones are higher when they are newly launched. They decided to sell their gemstones at a higher price during the first 3 months when they are just released. This is an example of price discrimination. Type F for First Degree, S for Second Degree, T for Third Degree or P for Peak Load Pricing. b. As a new year is approaching, GemT and Rares are deciding whether to launch a new collection of Tanzanite gemstones. Launching a new collection will bring in higher revenue but will also incur large marketing and design costs. GemT's payoff will also be will be affected by Rares" decision to launch a new collection and vice versa. The payoff values (in millions of dollars) below represent the expected first-year economic profits from each strategy. What will be the resulting first-year payoff be for GemT (the left player) after playing the game if Rares is the top row player? $ Answer in millions of dollars (i.e. a value shown in the table, with no decimal places, $ sign, spaces or commas). Launch Does not launch c. What is the dominant strategy for Rares? Launch 17, 25 0,79 Does not launch 79,5 27, 17 Type L for Launch, X for Does not launch or N for No dominant strategy. d. If GemT and Rares are able to communicate and collaborate, would they be able to achieve a collectively better outcome? Type Y for Yes or N for No.

Answer rating: 100% (QA)

a T Third Degree Pricing b 795 c L Launch d Y Yes a Third Degree Pricing can be defined as a pricing strategy which sets the price of a product based ... View the full answer