1."In a long run, a profit-maximizing firm would never knowingly market unsafe products. However, in the short run, unsafe products can do a lot of damage" Discuss this statement.
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- The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC 8 MR3 AVC 6. MR2 MR1 Quantity 100 200 300 400 a)At what price will Rahim try to minimize loss by selling eggs in the market? b)At what price will there be a break-even point?Exercise 5.8 The makers of Panadol pain reliever do a lot of advertising and have very loyal customers. In contrast, the makers of generic paracetamol do no advertising, and their customers shop only for the lowest price. Assume that the marginal costs of Panadol and generic paracetamol are the same and constant. a. Draw a diagram showing Panadol’s demand, marginal revenue and marginal cost curves. Label Panadol’s price and mark-up over marginal cost. b. Repeat part (a) for a producer of generic paracetamol. How do the diagrams differ? c. Which company has the bigger mark-up? Explain. d. Which company has the bigger incentive for careful quality control? Why? e. How might barriers to entry influence the behaviour of the makers of Panadol ? f. What factors would affect the extent to which the makers of Panadol could engage in predatory or destroyer pricing to force out competitors in this market?The global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. a. If PFIZER is the sole vaccine provider given the following information, answer the questions below: Output Price/Unit Total Cost 1 5500 1000 2 5000 1200 3 4500 1500 4 4000 2500 5 3500 4000 6 3000 5700 7 2500 7500 8 2000 9400 9 1500 11400 10 1000 13500 Given the tabular information above find the profit-maximizing output and price also illustrate the same using the two-dimensional labeled diagram. Show the calculation as well. b. Assume if many firms enter into the business of providing vaccine determine: How the demand curve of PFIZER would change and how it would now maximize its profit? The kind of market structure now PFIZER…
- 17 of 16 BNW is one of many producers of luxury wheelchairs, which are differentiated to appeal to different market niches. BNW's Price per chair relevant demand and cost curves are depicted in the graph. $2,000 Average total Use this graph to answer the questions. Assume that there are 1,800 Marginal cost no significant barriers to entry. cost 1,600 Determine BNW's profit-maximizing price and quantity. 1,400 1,200 1,000 price per chair: $ 800 600 400 quantity of chairs: chairs 200 Demand Marginal revenue 100 200 300 400 500 600 700 800 900 Calculate BNW's profit. Chairs per week BNW's profit: $Scenario One source of new-product ideas is competitors. When Steven Fischer recently joined Frankie and Alex Specialty Products as a brand manager, his new boss told him, “We don’t have a budget for new-product development. We just monitor our competitors’ new-product introductions and offer knockoffs of any that look like they will be successful.” Is this practice ethical?1. Predict the effect higher margins for your products would have on your competitors.
- If you were developing a product (like a web browser) for a market with significant barriers to entry, how would you try to get your product into the market successfully?The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC MR3 AVC MR2 MR1 Quantity 100 200 300 400 a)lf the market price per egg is 8tk, in order to maximize profit how many eggs does Rahim sell? b)lf the price stays at 8tk, what happens in the long run? choose from the following options. option 1: Rahim stops selling eggs. option 2 : New firms enter into the egg market option 3: all existing sellers suffer from an economic loss. c)lf the price falls down to 3tk price, which of the following option does Rahim have in short run? option1: Temporarily shutting down the business business option 2 : staying in generating no profit option 3: indifferent between staying in and going Out of the market. but22 Which of the following is a differentiated product? A Perfume BO Wheat Natural gas Electricity
- Phoenix Electricity is the only company providing electricity in City H. Will Phoenix Electricity earn a larger or a smaller amount of profit? Use words only to explain your answer.The graph shows the situation facing Mike's Bikes Inc., a producer of mountain bikes. The demand and costs of other mountain bike producers are similar to those of Mike's Bikes. Draw a point to show the quantity of mountain bikes that Mike's produces and the price of a bike. Draw a shape to show the firm's economic profit or loss. Label it 400 350- 300- 250 200- 150- 100 50- 0+ Price and cost (dollars per bike) 0 MC ATC MR D 50 100 150 200 250 300 Quantity (mountain bikes per week) >> Draw only the objects specified in the question. Q EA small town with a movie theater has 300 adults and 200 seniors. The theater is considering putting on a special one-time screening of a new movie. This screening has a fixed cost of $2,000, but the marginal cost of selling an additional ticket is zero. According to a survey, all the adults and seniors would be willing to purchase the tickets at $7 and $4 respectively. a. What prices would the movie theater charge for an adult ticket and for a senior's ticket if it wanted to maximize profit? Explain and calculate the profit. b. Suppose a law is passed that prohibits the movie theater from charging different prices to adults and seniors. What price would it set for a ticket now? What is the profit? c. Who is worse off because of the law prohibiting price discrimination? Who is better off? d. If the fixed cost of the concert was $2,500 rather than $2,000, how would your answers to parts-(e) change?