1. Irene’s Dairy is deciding whether or not to enter the market for ice cream, currently monopolized by Mattie’s Ice-cream. If it enters the market, Mattie’s can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.? In a sequential game, given Mattie’s best response function, what would Irene’s best response be?
2. Explain the economic usefulness of Porters Five Forces Model.
3. Explain assumptions underlying the resource based view.