A Cultural Diversity Training Program - 1213 Words

With many organizations expanding and becoming more global organizations, whose businesses deal with other countries, cultural diversity becomes more challenging. That is why it is important for organizations to create a cultural diversity training program to encourage employee from different backgrounds to come together and learn each other s belief system which can enhance the organization s ability to problem-solve. To do this successfully an organization needs to create an organizational climate that promotes a learning organization. Which learning organization was first coined by Peter Senge (Kopp, 2014). According to Kopp (2014), Senge defined a learning organization as â€Å"an organization where people continually expand their†¦show more content†¦By having a training program in place of cultural and diversity areas can help prevent the organization in getting sued or prevent a major lawsuit. That is why organizational leaders are charged with making sure they are in compliant with Federal and State laws. If an employee feels they have been treated differently, because of their culture, age, color, religion, or physical disabilities, this could lead to legal trouble for the organization (Kesee, 2010). One of the organizations that prohibit organizations from discriminating against workers for any reason is the U.S. Equal Employment Opportunity Commission. Human resources can do research on the U.S. Equal Employment Opportunity Commission’s website, who does provide information on ways for organizations to avoid discrimination for employer and employees (Keese, 2010). The U.S. Equal Employment Opportunity Commission website also contains information on employment laws. Along with reviewing U.S. law, human resources will also have to look into the legislation of the country the organization has offices in those countries. That is why it’s essential for management and employees to be aware of the different cultures within the organization, and culture values. An example is knowing other ethnic holidays, and not just American holiday’s and making sure they get the same attention as American holidays likeShow MoreRelatedDiversity Training And Its Effectiveness1240 Words   |  5 PagesDiversity may be defined as recognizing and respecting the similarities, differences and unique characteristics an individual employee contributes to the workplace. Diversity training and its effectiveness in the workplace has been met with differing conclusions as to the positive or negative impact this type of training may have on an organization. Today, change in the workplace is inevitable and diversity training in the workplace has become common across the globe. Companies now realize thatRead MoreCross Cultural Leadership And Diversity975 Words   |  4 Pages8.4.CM - Leadership Concept Map Chapters 14 Cross-cultural Leadership and Diversity Globalization and changing demographic patterns are making it more important for leaders to understand how to influence and manage people with different values, beliefs, and expectations. There has been more leadership research on cross†cultural aspects and gender differences than on other types of diversity (Ospina Foldy, 2009). Importance of Cross-cultural Research Leaders must also be able to understand howRead MoreTo Resolve The Insensitivity Complaints Of Key Employees,1127 Words   |  5 PagesTo resolve the insensitivity complaints of key employees, which relate to diversity, particularly gender, ethnicity, and religion, Air Aces hired Tyrone Williams (CEO) after airport clients filed numerous complaints regarding airport employees who lack cultural awareness while interacting with diverse groups of customers. Consequently, this insensitivity affects the hiring process and promotion within the Air Aces. Therefore, the objective of the paper is to develop methods of addressing these sensitiveRead MoreThinking About Diversity and Inclusion808 Words   |  4 PagesThinking about diversity and inclusion 1. What are the dimensions of cultural diversity? Identify and briefly explain the dimensions by referencing both textbooks. The dimensions of cultural diversity consist of in the diverse cultures in the world. The diversity is the different race, gender, age, ethical, language, religion, education, and more. The geographic region and the social roll are the result of the cultural diversity in the world. The diversity is variable and depends of the human’sRead MoreGlobal Leadership And Organizational Behavior Effectiveness1671 Words   |  7 Pagesstereyotypes, leaders need to be culturally intelligent. Cultural intelligence. With the increasing globalization of organizations and diversiï ¬ cation of domestic workforces, understanding why some individuals function more effectively than others in culturally diverse situations has become more important than ever (Gelfand, Erez, Aycan, 2007 as cited in Van Dyne et al., 2012, p. 295). Earley and Ang (2003) introduced the concept of cultural intelligence (CQ) deï ¬ ned as the capability of an individualRead MoreThe Manager Conducts Team Building Activities1694 Words   |  7 PagesAccording to Cox and Blake (1991), the management of diversity involves a whole diversity philosophy and this includes the establishment of a sound organization culture that values inclusion. The effectiveness of the activity begins with sound aims and objective. In this regard, the manager had instituted a companywide team building initiative that is aimed at changing the employees mind set about diversity; address intersections of diversity, influence o n culture, gender as well as age differencesRead MoreEmployee Training Plan For Employees1716 Words   |  7 Pages Employee Training Plan Executive Summary ï‚ § The Employee Training Plan creates a strategy to provide employee-training resources with its organizational priorities. ï‚ § This plan establishes a standardized plan to meeting the training needs for all employee in the organization. ï‚ § Training is linked to the mission, goals and outcomes of organization. It is developed in partnership with the stakeholders and CEO’s requesting the training. ï‚ § There is a shared delivery system consisting of facilitiesRead MoreDiversitys Impact on Organizations1630 Words   |  7 PagesAbstract Diversity must be created and maintained with in organizations. The purpose of this paper is to examine the impacts of diversity onto an organization in addition to explaining the legally mandated and stakeholder driven explanations for mandatory diversity. Diversity’s Impact on Organizations Diversity within an organization is a blending of people from various cultural, religious and ethnic backgrounds. Diversity has challenged organizations to setRead MoreHealthcare Management and Article Critique709 Words   |  3 Pagesorganizational productivity. As the Chief Executive Officer of a hospital, I would design an incentive compensation program for my management team by aligning the financial rewards with business objectives and people costs. This will involve the use of a comprehensive approach that examines basic pay, health benefits, incentive opportunities, and retirement programs. The alignment of the compensation program is geared towards promoting organizational productivity and employee motivation. 2. The healthcare workforceRead MoreAddressing Cultural Competence For Improving Healthcare Quality1605 Words   |  7 PagesAddressing Cultural Competence for Improving Healthcare Quality Improving diversity in health care setting is important in patient care. Cultural competence is approach to enhancing healthcare delivery that has been promoted broadly in recent years. By definition cultural competence in health care describes the ability of systems to provide care to patients with diverse values, beliefs and behaviors, including tailoring delivery to meet patients’ social, cultural, and linguistic needs (Betancourt

Grove street Advisor Example

Essays on Grove street Advisor Case Study Case Study Questions – GSA How does Grove Street Advisors propose to create value for its investors? Are these arguments plausible? Grove Street Advisors propose to create value for its investors by using the funds-of-funds approach to manage customized private equity portfolio of funds for its clients. The company addresses specific needs of customers through a customized approach of managing funds and provides them with access to exclusive funds. Grove Street Advisors proposed to use funds-of-funds to aggregate many small investments in order to solve the problem of diversification because investors can just contribute a small amount of funds which is then spread across different firms using the fund-of-fund approach (Rhodes-Kropf and Leamon, 2010). Fund-of-funds also uses its expertise to collect information about multiple private equity funds available. It also allowed investors to have access to private equity organisations of high quality. Fund-of-fund is used to manage a large amount of money and channel it to different firms. It may also be used to handle everyday details of private equity organisations including monitoring and reporting. Another way that Grove Street Advisors propose to create value for investors is by providing customized funds tailored to the needs of clients. For instance, larger clients can be provided with private equity program support so that GSA can manage part of the programs which may be inefficient for the clients or investors to do. Factors such as scale, geography, or sector make it difficult for investors to do some parts of private equity program or investment. GSA may handle the entire program for its small clients in order to create value for them. GSA also allocates funds by sector, geography, and year in order to create a good program vision for its investors (Rhodes-Kropf and Leamon, 2010). GSA invests in a particular fund on behalf of its clients based on their needs and the existing fund relationships. 2. Why would private equity firms be interested in having GSA as a potential investor? Private equity funds would be interested in having GSA as a potential investor because it would connect them to customers. GSA allocates funds through program visions and funds-to-funds vehicles. GSA has the willingness to transfer its relationship with the private equity firm to the client over time. This takes different approaches that allow the private equity firm to access a wide range of clients. According to the Grove Street Advisors, its clients are the clients of private equity firms. As a result, private equity firms can be interested in having Grove Street Advisors as a potential investor because it links them to its customers. First, uses a client’s account to invest in a good fund which allows private equity firms to know GSA’s clients through the GSA (Rhodes-Kropf and Leamon, 2010). In this case, the fund generated by Grove Street Advisors comes from the account of its clients. These funds are to be used by the private equity fund; hence the private equity firm will know and acquire GSA’s clients through the fund established by the GSA. Secondly, if the private equity firm raises another fund, Grove Street Advisors may use the funds of its clients and allow the client to invest in its own money alongside GSA (Rhodes-Kropf and Leamon, 2010). This allowed the private equity firm to know the client more. This essentially means that the Grove Street Advisors acts as an intermediary to link its clients with private equity investors. The entire money to be invested may also come from the client, which is then used to create a core portfolio. The private equity investor can benefit by getting access directly to the funds provided by GSA’s client with GSA benefiting from it because it does not receive compensation in this stage. 3. What do you think of GSA’s willingness to let its clients bypass them and invest directly in the fund managers located by GSA? Grove Street Advisors is willing to let its clients bypass them and invest directly in the fund managers located by GSA. This benefits private equity firms more than the GSA. In this case, the relationship is transferred to the clients of Grove Street Advisors. This allows small clients who do not wish to manage their private equity portfolios to avoid contributing to the funds pooled by the Grove Street Advisors. This does not look beneficial to the GSA because the Grove Street Advisors does not get any compensation through the process. However, the company can act as an intermediary through which clients can develop relationships with large investors. Allowing clients to bypass them invest directly in the fund managers enables GSA to add value to both LP and GP in the relationship despite not receiving compensation. In this regard, it is plausible for Grove Street Advisors to allow its clients to bypass them and engage directly with fund managers because as the clients becomes able to invest directly due to increasing GP, it no longer adds a lot of value for GSA to be engaged (Rhodes-Kropf and Leamon, 2010). Therefore, GSA gets out of the way at this point. This decision by GSA also allows for the continuity of a long-cycle business whereby larger clients stay fresh as clients renew their justification to work with GSA. The main purpose of Grove Street Advisors in its business is to add value to clients by providing funds and managing clients’ funds as they invest. However, if the company does not achieve this value addition, there is no need to continue with the relationship. Instead, it becomes correct to pass the relationship from the fund manager to the client so that the client can decide how to invest his money. 4. How should GSA proceed? As the business grows, Grove Street Advisors should proceed by identifying specific private equity firms that can match specific funding requirements of its clients. In order to achieve this, the company should categorise its clients according to the amount of funds that they can raise. Clients with small funds can then be linked to the private equity firms that require small amount of funds. Going forward, GSA should also enhance uniformity among its clients. This can be achieved by allowing all clients to contribute the amount of funds they can afford and then bringing in other investors and partners to bridge the gap between the least contributors and the largest contributors. This ensures that both small and big clients contribute towards the compensation of GSA regardless of whether they can engage directly with the fund managers or not. It will also bring equality and efficiency in resource allocation in the financial market and the economy in general. References list Rhodes-Kropf, M. and Leamon, A. 2010. Grove Street Advisors: September 2009. Harvard: Harvard Business School.

Fuzzy Topsis Method Free Essays

Fuzzy TOPSIS method This is an approach based on the TOPSIS technique (Technique for Order Preference by Similarity to Ideal Solution) and the fuzzy set theory. The TOPSIS method is based on the concept that the optimum option has the least distance from the positive ideal solution. It is a linear weighting technique, which was first proposed, in its crisp version by Chen and Hwang(1992), with reference to Hwang and Yoon(1981). We will write a custom essay sample on Fuzzy Topsis Method or any similar topic only for you Order Now Since then, this method has been widely adopted to solve MCDM problems in many different fields. Because decision information is uncertain instead of certain in most environments, further extension for group decision making problems under fuzzy environment was published by Cheng(2000),known as Fuzzy TOPSIS. The selection of the third-party provider is a typical MCDM problem. In this method firstly we screen out providers that have not minimal qualifications by the selection criteria. Then closeness coefficient of contractors to each proposal will be computed by Fuzzy TOPSIS method and finally these coefficients as successful indicators for each provider will be fed in to a linear programming to select most profitable projects and providers with respect to the constraints. The stages are described blow: Stage1: Eliminate contractors that haven’t minimal qualifications. For the purpose of analysis, selection criteria need to be rationally selected at first. There are a lot of researches with respect to the decision criteria for evaluating the supplier. Such as the study of Dickson(1966), Ellram (1990),Weber et al. (1991), ,Grupe (1997), and Akomode et al. (1998). According to an empirical survey, the top four selection criteria are responsiveness to service requirements, quality of management, track record of ethical importance, and ability to provide value-added services. The less important selection criteria are listed in a descending order as below: low cost, specific channel expertise, knowledge of market, personal relationship with key contacts, willingness to assume risk, investment in state-of- art technologies, size of firm, and national market coverage. Keeping the outcomes of the supplier selection literature review as a guideline, we derived the relevant factors to evaluate in the provider selection process based on the outsourcing view. However selection of criteria is totally industry specific and based on each case and the criteria are changed and replaced. Then opinions of decision makers on criteria were aggregated and weights of all criteria have been calculated by organizing the expert meeting. Meanwhile, the outcomes of the supplier selection literature review should be kept as a guideline. Stage2: Computing closeness coefficient (CC) for each project by fuzzy TOPSIS method So after we have obtained the important evaluation criteria and the qualified provider candidates to form the MCDM problem,the ranking of the shortlisted vendor providers will be done using the fuzzy TOPSIS approach. First,choose the appropriate linguistic variables for the importance weight of the criteria ,asses the importance of each contractor in each project with respect to each criterion by DM, using linguistic variables. Convert these evaluation into triangular fuzzy numbers with fuzzy weight for each criterion. Fuzzy weight wj of criterion C j are obtained with regard to DM’s opinions. Then the importance of the criteria and the rating of alternatives with respect to each criterion and the aggregated rating Xij under criteria C j can be calculated as: Wj=1K[Wj1+Wj2+†¦+Wjk] xij=1K[xij1+xij2+†¦+xijk] Wjk is the importance weight of the kth decision maker. xijk is the rating of the kth decision maker. Construct the normalized fuzzy decision matrix. If we describe the linguistic variables by triangular fuzzy numbers, xij=(aij,bij,cij) and wij=(wj1,wj2,wj3)then we can get the fuzzy decision matrix denoted by R, and R= R=[rij]m? n. rij=(aijcj,bijcj,cijcj) rij=(aj-aij,aj-bij,aj-cij) Next, the weighted normalized fuzzy decision matrix is constructed by : V=[vij]m? n, i=1,2,†¦,m j=1,2,†¦,n Where vij=rij(. )wj After all of these analysis and calculation ,a positive-ideal solution (PIS, A+) and a fuzzy negative-ideal solution (NIS,A-) as the criterion are chosen. The best alternative solution should be the closest to the Positive Ideal Solution (PIS) and the farthest from the Negative Ideal Solution (NIS). A+=(v1*,v2*,†¦,vn*) A-=(v1-,v2-,†¦,vn-) vj*=1,1,1 vj-=0,0,0 Calculate the total distance of each components from the fuzzy positive ideal and negative ideal: ? If A and B are two fuzzy numbers as follows, distance between these fuzzy numbers is calculated by equation below: A=(a1,b1,c1) B=(a2,b2,c2) Equation : DA,B=13[a2-a12+b2-b12+c2-c12] Given the above description on how to calculate the distance between fuzzy numbers, the distance of components from positive and negative ideas can be derived respectively as: di*=j=1nd(vij,vj*), i=1,2,†¦,m di-=j=1nd(vij,vj-), i=1,2,†¦,m In the end,the relative closeness coefficient (CC)of each contractor-project in each criterion can be calculated as: CCi=di*di-+di+, i=1,2,†¦,m Stage3: Selecting the best projects and related contractors Select the best projects and related contractors by ranking options based on the descending cci. An alternative with index cci approaching 1 indicates that the alternative is close to the fuzzy positive ideal reference point and far from the fuzzy negative ideal reference point. A large value of closeness index indicates a good performance of the alternative. A case study: The proposed methodology for supplier selection problem, composed of TOPSIS method, consists of three Steps: (1) Identify the criteria to be used in the model; (2) weigh the criteria by using expert views; (3) evaluation of alternatives with TOPSIS and determination of the final rank. The case is that of a major company operating in the dairy products field. In the first phase, the project team operated mainly through roundtable discussions on developing their main selection criteria. After identity the criteria attributed under consideration, five alternatives suppliers are written in the list. There are several criteria need to be considered, and each vendor’s information under each criteria are collected, calculating each vendor’s overall rating weight, shown in Table 2. (Mohammad Saeed Zaeri,2010) Finally, the closeness coefficient was calculated to rank alternatives. The results obtained are shown in Table 4: (Mohammad Saeed Zaeri,2010) The order of rating among those vendors is Supplier3;gt; Supplier 4;gt; Supplier 1;gt; Supplier2;gt;Supplier5, the best vendor would be Supplier3. To conclude, the TOPSIS method had several advantages. First, TOPSIS makes it possible to appraise the distances of each candidate from the positive and negative ideal solutions. Second, it allows the straight linguistic definition of weights and ratings under each criterion, without the need of cumbersome pairwise comparisons and the risk of inconsistencies. It evaluates the projects and each provider more precisely by expert decision makers in each stage of the whole process. Moreover, the method is very easy to understand and to implement. All these issues are of fundamental importance for a direct field implementation of the methodology by logistics practitioners. However TOPSIS is proved to be insensitive to the number of alternatives and has its worst performance only in case of very limited number of criteria. In order to apply fuzzy TOPSIS to a MCDM problem, selection criteria have to be monotonic. How to cite Fuzzy Topsis Method, Papers

Economics Economic Theory Bulletin

Question: In mentioned cases provide a neat diagram to explain your answer. Make sure to label axes properly. Else points will be deducted. The maximum possible points is 40. A local firm in Abu Dhabi is operating under a perfectly competitive environment. If price in market is 4 AED and their total cost is 500 AED (including the fixed cost of 200 AED) for output of 30 units, then should they continue to produce or shut down in short run? Provide your answer with a relevant diagram and explain your answer in few words. (10 points) Recent research has documented the fact that Coke is something different compared to other soft drinks. In fact related literature states that Coke has already attained the monopoly status. If we assume the research is correct and coke is a monopolist, then a) Do you think that coke actively engages itself in price discrimination? B) If so, what type of price discrimination they are engaged in? Discuss your answer with a relevant diagram. (10 points) Etisalat and Du are duopolists. If they form a cartel between themselves, then what will happen to price and output in the market. Discuss your answer with a relevant diagram. (5 points) 4). In a recent conversation a policy maker argued that since DEWA is monopolist, they are charging higher price and lower output is produced. He further mentioned that government should split the entire unit into small pieces so that competition can drive down prices. Do you agree with this statement? Explain your answer in few words. Provide a relevant diagram. (5 points) 5) Consider the following pay-off matrix (Numbers in the matrix reflect their respective profit levels) for two gas stations. Gas station A Gas Station B High price Low price High price 200,000 AED; 200, 000 AED 50,000 AED; 400,000 AED; Low price 400,000 AED; 50,000 AED 80,000 AED; 80,000 AED; If each firm follows their dominant strategy, then what will be their respective profit levels? And if they collude then what is their new profit level? (5 points) 6) A cosmetic firm operating in a monopolistically competitive market environment spends a lot of money in advertisement and ends up with super-normal profit even in long run. Is it possible? Explain your answer in few words. (5 points) Answer: 1. The market price at Abu Dhabi is 4 AED. The total cost of the firm is 500 AED. The fixed cost incurred by the firm is 200 AED. Therefore, the variable cost of the firm will be (500-200) =300 AED. The output is 30 units. Therefore, the Average Variable Cost is Total Variable Cost Total output; i.e. 300 30 = 10 AED. According to the theory of perfect competitive market, a firm will shut down its production if the market price is less than Average Variable Cost (P AVC) (Shepherd 2015). Here, the market price 4 AED is far below than the average variable cost (10 AED). Figure 1:Shutdown Point of Production Source: Created by Author A firm in the competitive market continues its production even if the price is below Average Cost. This is because; still the price is exceeding average variable cost and firm will operate in the short run to cover its variable cost. At this situation, if the firm shuts down its production, there will be no variable cost but firm has to pay fixed costs. Fixed cost has to be paid by the firm, regardless of the decision of the firm. Hence, instead of AC, the decision will be based on looking into AVC. As long as the price is greater than AVC, the firm will cover all variable cost along with some part of fixed cost. Therefore, below the point where price is equal to AVC, firm is unable to cover its cost of production. At this point, the firm will shut down its production (Rubinfeld and Pindyck 2013). 2. Coke enjoys monopoly power in the market, so it can actively engage in price discrimination. This will enable the company to maximize its profit. Price discrimination can be of three types namely, first degree; second degree and third degree price discrimination. In the first degree price discrimination, the monopolist charges maximum price that each consumer is willing to pay. This type of price discrimination involves maximum exploitation. In the second degree price discrimination, the monopolist charges different price different quantities. Here lower price is charged for bulk purchase than a single unit. In the third degree price discrimination, monopolist divides the entire market into small groups and charges different prices for different groups of consumers (Aguirre and Cowan 2015). The coke is the most preferred soft drinks producing company. The demand for coke increases during summer season and falls substantially during winter. The elasticity of demand is high during winter and demand is inelastic during summer.Therefore, the firm can engage itself in the third degree price discrimination. The company can divide its market on seasonal basis and charge different price in different market. It will maximize its profit in summer by charging high price and in winter it will charge low price, as people might become price sensitive during winter. Moreover, Coke is an international company with numerous branches; manufacturing sector and retailers all over the world. The demand for soft drink is higher in the tropical region, where it is mostly summer, for example, in Kenya (Euromonitor.com 2016). The demand for Coke is significantly lower in the temperate or polar zone, where it is mostly cold. The company divides its market according to the climatic zone and charg e different price. In the polar zone, it cannot raise its price too much as demand is very elastic in nature. In contrast, the Coke company can maximize its profit by charging high price in tropical climate, s demand is highly inelastic. Figure 2: Third Degree Price Discrimination Source: Created by Author In the above diagram, it has been presented how different prices can be charged for different market. Coke will charge P1 where demand is inelastic in nature and P2 where demand is elastic in nature to maximize its profit. Hence, Coke will engage itself in the third degree price discrimination by dividing its market. 3. Etisalat and Du form a cartel between themselves, it implies the two firms decides to collude rather than competing with each other. There can be made an explicit collusive agreement, where they together decide their price and market sharing. The cartel can be implicit in nature, where collusion is secretive. By trusting each other these two firms create monopoly (Fonseca and Normann 2014). In this case, the firms decide to divide the monopoly output equally between themselves and sell it at the monopoly price. Here, both the firms will earn same amount of profit. Figure 3: Cartel in Duopoly Source: Created by Author However, the output of cartel is not on their best response curve. Therefore, it is possible that a firm cheats and produces best response output. Here, the total output will be best response output of firm 1 plus the cartel output of firm 2, which is more than total monopoly output (shared between these two firms). The market price will be lowered as well. The firm who cheated will earn higher profit and the firm who did not cheat will lose. If both firm cheats, the total output will be best response output of firm 1 and best response output of firm 2 that is greater than before. However, in such case, the price will be so low that the both firm will earn lesser profits than profits earned by forming cartel. Individual firm will be benefitted by cheating if another firm is not cheating. So cheating is better option for each firm. However, it is better not to cheat because, as cheating by both firms will lead to lesser profits earned by both firms. Therefore, price and output of cartel depends on trust (Bernheim and Madsen 2013). Figure 4: Best Responsive Function Source: Created by Author 4. DEWAis charging high price and producing lower output. By splitting the entire unit will improve its production efficiency; improved product and will lower down the unit costs. However, as DEWA is the Electricity and water supplier, this is a case of natural monopoly.Splitting may not increase competition in the traditional way. However, there will be a type of cost competition as each unit would be encouraged to be more efficient than others (Moszoro 2014). While DEWA charged high price for low output the profit of the firm is very high. After splitting into several units, it produces or supplies high level of output but faces loss due to low price. In general, splitting of production increases competition traditionally, as different units are less likely to share their information with other units. However, as DEWA is providing essential goods like electricity and water, the information cannot be kept secret. Hence, units might not achieve competitive advantage over other goods. Therefore, it can be concluded that, government decision of splitting DEWA into small units in order to increase competition, cannot be fully agreed. The following diagram represents the case of natural monopoly. It has illustrated the fact that, high price and low output indicates inefficiency in the market but the firm is earning high profit. However, low price and high output is efficient for society but there is no incentive for the firm as it will suffer from losses. Therefore, it can further be concluded that there is no improvement in the competition by splitting the firm as there is no incentive for the firm to produce at lower price, when it is operating in natural monopoly. Figure 5: Consequences ofNatural Monopoly Source: Created by Author 5. Gas station A Gas Station B High price Low price High price 200,000 AED; 200, 000 AED 50,000 AED; 400,000 AED; Low price 400,000 AED; 50,000 AED 80,000 AED; 80,000 AED; A strategy is said to be dominant for a player if he gets better payoff by selecting that strategy, regardless of what another player has chosen (Myerson 2013).From iterated elimination, the dominant strategy can be obtained. Gas station A Gas Station B High price Low price High price 200,000 AED; 200, 000 AED 50,000 AED; 400,000 AED; Low price 400,000 AED; 50,000 AED 80,000 AED; 80,000 AED; From the above pay-off matrix, the pay-off for Gas Station B is higher when it adopts low price regardless the choice of Gas Station A. If A choses High Price strategy, then B will be better off by choosing low price strategy, as 500,000 AED is greater than 200.000 AED. Similarly, if A selects Low price strategy, then also B will be better off by selecting low price strategy again, as 800,000 AED is higher than 400,000 AED. Therefore, low price strategy is the best possible choice for Gas Station B. Now, as B will always select low price strategy, Gas Station A will be better off by selecting low price strategy as the profit level will be higher in this case (800,000 AED 400,000 AED). The respective profit level will be 800,000 AED for both the firms When the firms collude with each other, it implies that it aims to maximize their joint profit. When the strategy is (Low Price, Low Price) then the joint profit of both firms will be maximized and the profit level will be 800,000 AED for both of them. So, there will be no change in their profit level. 6: In the short run, the monopolistically competitive firm, the firm maximizes the profit where MR=MC. The average cost is lower than this level, and thus the firm earns super-normal profit. This is represented in panel (a) of the following diagram. However, in the long run, the supernormal profit attracts new firm and the demand (AR) curve becomes more elastic (Roberts 2014). Therefore, at the point where MR=MC, the firm faces neither profit nor loss. This is represented in the panel (b). However, the cosmetic firm spends more money on advertisement.This has helped the firm to differentiate its product from other companies and establish significant brand loyalty. As a result of this, the AR or the demand curve does not become inelastic for the product of this company. Hence, in real world example, through advertisement, it is possible to earn super-normal profit even in the long run. Figure 6: Supernormal Profit in Monopolistically Competitive Market Source: Created by Author References Aguirre, I. and Cowan, S.G., 2015. Monopoly price discrimination with constant elasticity demand. Economic Theory Bulletin, 3(2), pp.329-340. Bernheim, B.D. and Madsen, E., 2013. Business Stealing in Imperfect Cartels. Working paper. Euromonitor.com. 2016. Soft Drinks in Kenya. [online] Available at: https://www.euromonitor.com/soft-drinks-in-kenya/report [Accessed 10 Aug. 2016]. Fonseca, M.A. and Normann, H.T., 2014. Endogenous cartel formation: Experimental evidence. Economics Letters, 125(2), pp.223-225. Moszoro, M.W., 2014. Public-Private Monopoly. Myerson, R.B., 2013. Game theory. Harvard university press. Roberts, K., 2014. The limit points of monopolistic competition. Noncooperative Approaches to the Theory of Perfect Competition, 3, p.141. Rubinfeld, D. and Pindyck, R., 2013. Microeconomics. Pearson Education. Shepherd, R.W., 2015. Theory of cost and production functions. Princeton University Press.