If clients in an industry have homogeneous price-quality choices, a company with higher than average industry unit costs will always have lower profit margins than a competitor with lower than average industry unit costs 1. True B. False C. To answer this question, more information is needed Why ?
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- 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…Select the correct one : Do both state and federal law protect aganist trademark dilution? A) Only some states have trademark dilution laws, but there is no federal law. B) There is a federal law, but no state law. C) Both federal law and some states have trademark dilution laws. D) Every state has a law against trademark dilution, but there is no federal law. E) Every state has a law against trademark dilution and there is a federal law .1. Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is -2.5. The marginal cost of producing the product is constant at $100, while average total cost at current production levels is $175. Determine your optimal per unit price if: Instruction:Round your answers to two decimal places. a. You are a monopolist. $ b. You compete against one other firm in a Cournot oligopoly. $ c. You compete against 19 other firms in a Cournot oligopoly. $ 2. You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -2, while group 2’s is -6. Your marginal cost of producing the product is $10. a. Determine your optimal markups and prices under third-degree price discrimination. Instruction:Round your answers to two decimal places. Markup for group 1: Price for group 1: $ Markup for group 2: Price for group…
- (c) Finally, let's assume you've been given the following information about maximum willingness to pay for a computer and a monitor: WTP Monitors WTP Computer $1,100 Chloe $500 Evan $600 $700 MC $400 $200 (1) What is the highest profit you can make with no bundling? Who buys what? (2) What is the highest profit you can make with pure bundling? Who buys what?c. If George is very experienced and knows the reservation prices of each customer, how many portraits will he produce each day and how much economic profit will he earn? d. Assume George charges only 2 different prices. He know that customers with reservation prices above $30, will never use coupons and the customers with reservation prices below will always use coupons. What price should George charge for portraits and what discount should he offer on the coupon?II. Problem 1. Tennis Products, Inc., produces three models of high-quality tennis rackets. The following table contains recent information on the sales, costs, and profitability of the three models: Average Quantity Sold (Units/Month) 15,000 5,000 10,000 Variable, Cost per Contribution Current Price Total Margin Per Unit Contribution Model Revenue Unit Margin* $225,000 85,000 250,000 $560,000 A $30 $450,000 175,000 450,000 $1,075,000 $15 $15 B 35 18 17 C 45 20 25 Total * Contribution to fixed costs and profits. The company is considering lowering the price of Model A to $27 in an effort to inçrease the number of units sold. Based on the results of price changes that have been instituted in the past, Tennis Products' chief economist estimates the arc price elasticity of demand to be -2.5. Furthermore, she estimates the arc cross elasticity of demand between Model A and Model B to be approximately 0.5 and between Model A and Model C to be approximately 0.2. Variable costs per unit are…
- 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?It is one of the barriers to entry when average cost continually decreases with output, implying that a single firm achieves the lowest possible unit cost by supplying the entire market. a. economies of scale b. control or resources c. strategic barriers d. pure quality and cost advantagesA local hospital offered to buy firm A for $5,000, and the offer was refused. However, many observers now perceive that firm A is “in play” and may be sold if the right offer comes along. a. In successful transactions, purchasers have typically paid ten times current profits. How much would firm A be worth to a buyer from outside the industry? b. Would you expect that firm B would be willing to pay more or less than an outside buyer? c. What is the most firm B would be willing to pay for firm A?
- 1. The (inverse) demand curve for the services of Oakland Pest Control Co. (OPCC) is given by P= $1000 - 2Q, where P is in dollars, and Q is residences/month. The cost equation is given by C = 2000 + 30Q. a. Sketch and label OPCC's demand and marginal revenue curves, and determine the maximum revenue it can make. b. What are OPCC's profit-maximizing price and output levels? c. How much profit does OPCC make if it services 100 residences per month?You own Athleticon, which manufactures athletic wear. Your new contract with Atlanta United, a professional soccer team, allows Athleticon to be the sole suppler of athletic wear with the “Atlanta United” logo. No one lese can manufacture athletic wear with the “Atlanta United” logo. What do you think will be Athleticon’s level of profitability on the sale of “Atlanta United” athletic wear? Explain why. Your contract with Atlanta United only lasts 3 years. It was not renewed. Other firms can now manufacture athletic wear with the “Atlanta United” logo It is now 5 years after your contract with Atlanta United was terminated. Any manufacturer that wants to can manufacture and sell athletic wear with the “Atlanta United” logo. What do you think will be the level of profitability and rate of return on manufacturing athletic wear with the “Atlanta United” logo? Explain why.The global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. If FARTER 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. Assume if many firms enter into the business of providing vaccine determine: How the demand curve of FARTER would change and how it would now maximize its profit? The kind of market structure now FARTER is forced to…