Week 1 Results - The Game The Week 1 Results Game Logic...

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Unformatted text preview: The Game The Week 1 Results Game Logic Game $5.1 I’ll stay! b und fo l dea 5 seconds est 5% don’t care $6 I’ll stay! $5 go away too pricey! every 5 seconds on average a customer arrives to each restaurant; 5% don’t have time to compare prices and queue lengths; others choose the restaurant with the smallest price and the smallest queue; if the chosen price is still to high or the queue is still too long, they just quit. Financial Results: Profits Top-10 Financial profits are displayed in thousands; only the ten most profitable firms are displayed; for the full statistics download the table at the end of this presentation. Financial Results: Profit Margins Top-10 Financial Profit Margin = Profits / Revenue; it indicates business’ financial efficiency; only the most efficient firms are displayed; usually higher profits require lower margins. Operational Results. # of Customers Top-10 Operational number of customers is displayed in thousands; notice that the high number of customers doesn’t always correspond to high notice profits. profits. Operational Results. Price matters Operational this is not the real demand curve, it only displays the factual price and number of this customers, but doesn’t account for differences in average queue lengths; customers, competition was extreme: prices above 5.5 were considered to be too high; the red line displays a logarithmic approximation of the factual demand. Results Table and Recommendations Results Adobe Acrobat Document Download the table above to access all the available information including the Download data for the firms not displayed on the previous slides. data Table doesn’t include any information about workers and managers employed. Table This is considered to be commercial secret. This Try to analyze your price and other firms’ prices. Which price led to the highest Try number of customers? Which price led to the highest profits? number Why do you think some firms got more customers even considering their price Why was not the lowest? was Calculate the weighted average price by summing all revenues for all firms and Calculate dividing the result by the sum of all consumers. dividing Do you think it is a good idea to set your price to this average level? How can you increase your profit margins? Higher price? More customers? How Lower costs? Lower ...
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This note was uploaded on 12/15/2011 for the course ECON 304K taught by Professor Ledyard during the Fall '08 term at University of Texas.

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