You are the manager of Taurus Technologies, and your sole competitor is Spider Technologies. The two firms' products are viewed as identical by most consumers
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- You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 4Qi, and the inverse market demand curve for this unique product is given by P = 160 – 2Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $200, Taurus Technologies can bring its product to market before Spyder finalizes production plans. Should you invest the $200? Explain.You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 410 −2 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $1,000, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.)What are your profits if you do not make the investment? $What are your profits if you do make the investment?Instructions: Do not include the investment of $1,000 as part of your profit calculation. $.You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 110 −3 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $100, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make the investment? $ What are your profits if you do make the investment? Instructions: Do not include the investment of $100 as part of your profit calculation. $
- You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms' products are viewed as identical by most consumers. The relevant cost functions are (Q) = 4Qj, and the inverse market demand curve for this unique product is given by P= 940 -3 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $2,000, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make the investment? What are your profits if you do make the investment? Instructions: Do not include the investment of $2,000 as part of your profit calculation. $ %24You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms' products are viewed as identical by most consumers. The relevant cost functions are C(Q) = 4Q₁, and the inverse market demand curve for this unique product is given by P= 580 -3 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $1,000, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make the investment? $13762,56 What are your profits if you do make the investment? Instructions: Do not include the investment of $1,000 as part of your profit calculation. $ Should you invest the $1,000? No - the benefits of establishing the first-mover advantage exceed…You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms' products are viewed as identical by most consumers. The relevant cost functions are C(Q) = 2Qj, and the inverse market demand curve for this unique product is given by P= 50 –2 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $40, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make the investment? What are your profits if you do make the investment? Instructions: Do not include the investment of $40 as part of your profit calculation. Should you invest the $40? Yes - the cost of establishing the first-mover advantage exceeds the benefits. O No - the…
- You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by consumers. The relevant total cost functions are C(Qi)=2(Qi)for each firm, and the inverse market demand curve for this unique product is given by P = 50 – Q, with Q the total quantity. Currently, you and your rival simultaneously (but independently) make production decisions. b. Suppose by making an unrecoverable fixed investment of $40, Taurus Technologies can bring its product to market before Spyder finalizes its production plans. If so, what is your quantity and profit? Should you make the investment of $40? a. What is the current optimal quantity and profit of Taurus Technologies?You are the manager of Taurus Technologies (Firm 1), and your sole competitor is Spyder Technologies (Firm 2). The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Q1) = 120 + 8Q1 and C(Q2) = 120 + 12Q2, and the market demand curve for this unique product is given by P = 160 – 2.5Q. Given this information, the profits for firm 1 are = $__. Give typing answer with explanation and conclusionper pair You are the CEO of a company that advises clients on pricing strategies. Bilbo Baggins is a profit maximizing client who produces uniquely styled shoes and hires you for pricing advice. The graph shows the demand and marginal revenue (MR) curves faced by Bilbo's company for two different groups of consumers. Assume Bilbo can prevent the reselling of his shoes, faces constant marginal cost (MC) equal to $20/pair, can identify varying consumer groups, and has no fixed costs (so, MC ATC). Use the graph to answer the questions. = Price $100 90 80 70 60 50 40 B What price should Bilbo charge? He should charge the more elastic group $60/pair and the less elastic group $70/pair. 30 30 20 10 10 MR 2 Demand 2 He should shutdown in the short run because price is not greater than fixed costs. 0 100 200 300 40C He should price discriminate and produce where P = MC and charge $20/pair. He should produce where MR = MC and charge $70/pair.
- Suppose the Boston to Philadelphia airline route is serviced by three airlines – US Airways (Firm A) and JetBlue (Firm B) and Continental (Firm C). The demand for airline travel between these two cities is Q = 150 – p. The cost function is C(Q) = 30Q. The cost function is the same for all three airlines. Assume that the three airlines are making investments in airline capacity. In other words, they are simultaneously choosing quantity. (Cournot Competition) Derive US Airways’ residual demand function given JetBlue’s output, qB, and Continental’s output, qC. What is the Marginal Revenue for US Airways? Derive US Airways reaction function Derive the market equilibrium quantity, Q*, price, p*, and Profit.You are the manager of Taurus Technologies (T), and your sole competitor is Spyder Technologies (S). The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(QT) = 120 + 8QT and C(QS) = 120 + 10QS, and the market demand curve for this unique product is given by P = 160 – 2.5Q. Instructions: Use no decimals. Use the average cost to calculate monopoly profits. Do not round if values are used to complete other calculations. Complete the following table. Q1 Q2 P Profits T Profits S Duopoly competition 854 CollusionProblem # 1 You are the marketing manager of a firm that produces Titanium and sells this metal to two distinct kinds of customers: aircraft producers and golf club manufacturers. Demand for Titanium by these two market segments is quite different, as described by the respective price equations: PA = 10 - QA./600 and PG = 12 - QG./100, where annual quantities are in thousands of pounds and prices are in dollars. Your firm estimates the marginal cost of titanium production at $4 per pound. a) What is the optimal price and quantity for the aircraft segment? b) What is the optimal price and quantity for the golf segment?