Determine pull ups profit-maximizing output level

Assignment Help Business Management
Reference no: EM131191672

Problem: You are named CEO of a firm called PullUps. The firm produces diapers for "toddlers" as well as for old age. The company has a new patented technology that allows it to produce diapers at a lower cost and faster than its only rival, a firm called Oldies. PullUps uses will use this technological (and cost) advantage to be the first to choose its profit-maximizing output level. The inverse demand function for this type of diapers is P = 500 - 2Q. However, due to its unique patented technology, PullUps costs are Cp(Qp) = 2Qp, while Oldies costs function is CO(QO) = 4QO.

Required:

a. Determine Pull Ups profit-maximizing output level? What about Oldies'?

b. Determine the market's equilibrium price?

c. According to a) and b), how much profit does each firm earn?

d. If we ignore issues (let's assume the market for this product is very small), would it be profitable for your firm to merge with Oldies? If not, explain why not; if yes, please come up with an offer that would allow you to profitably complete the merger

Reference no: EM131191672

Questions Cloud

Producing beach balls or going to the beach : Suppose you can spend your time doing two things - producing beach balls or going to the beach. (That is, you havetwo mutually-exclusive alternatives.) Suppose you can produce a beach ball at a cost of $1 per ball and you can producetwo balls per ..
Discuss given comment from the viewpoint of a consumer : Discuss given comment from the viewpoint of each of the following: - A music company executive. - A consumer. -A TV executive.
Provide accurate information to consumers : An argument can be made that the Government could improve consumer welfare by requiring companies to provide accurate information to consumers about their products.
Are the formulas independent of n : For a probability distribution over N, N + I, N + 2, ... , where N is a positive integer, express P(X=x) in terms of P(x), in terms of Q(x). Express E(x) in terms of Q(x). Are the formulas independent of N
Determine pull ups profit-maximizing output level : a. Determine Pull Ups profit-maximizing output level? What about Oldies'? b. Determine the market's equilibrium price? c. According to a) and b), how much profit does each firm earn?
How do you rate availability of the services from esd : How do you rate availability of staff in timely manner as regards requests raised and how do you rate providing services correctly and reliably the first time?
Identify type of capital maintained when measuring unit cost : Identify the type of capital maintained when the measuring unit is (a) nominal dollars, (b) constant dollars, and (c) current costs. When would nominal cost and constant dollar measurements provide equivalent results?
Curve and demand curve change : As the cyclone influences the banana's crop and why after the cyclone, the price of banana still goes up? and if explain by using graphs. does both supply curve and demand curve change? or only the supply curve change and assume that the demand st..
Find current residual value of old office equipment : Office equipment is depreciated at 20% per annum in accordance with the reducing balance method. The current residual value of old office equipment was estimated at R1 800,00

Reviews

Write a Review

 

Business Management Questions & Answers

  Describe five technology and business trends

Describe five technology and business trends that have enhanced the role of information systems in today's competitive business environment

  Focus your memo on the ethical implications of the sale

Choose one side or the other--don't sit on the fence. Focus your memo on the ethical implications of the sale.

  Goals-approaches of health care operations management

To make the best use of the concepts and tools of operations analysis, a manager must understand what health care operations management actually encompasses. For this Discussion, you are asked to summarize the functions and goals of operations man..

  Digby corporations balance sheet

What will the accumulated depreciation expense for this purchase - Digby Corporations balance sheet

  Organizational behavior journal article report

This paper is an opportunity for you to reflect on your learning from the readings and discussions that took place during the course - to apply them to the Organizational Behavior information contained in your chosen journal article.

  The managing partner in a law firm that''s triumph ready

You're the managing partner in a law firm that's triumph ready to hand out Partnerships. You're aware that a few of the voting partners harbour somewhat old-fashioned views about the attitudes

  How does wild planet generate promotional benefits

Illustrate what basic principles does Wild Planet adhere to in their product development? Which is, think about non product benefits to the child also in the long term benefits to Wild Planet which ensue.

  Explain marketing techniques by traditional businesses

charities are using marketing techniques very similar to the ones used by traditional businesses and are there any issues related to this practice that you would like to raise

  Team to function effectively and efficiently

1. The stage of a team's life cycle when norms are established that enable the team to function effectively and efficiently. 2. Allows managers to know exactly who they report to and give directives to.

  Asset management strategic planning

You are an asset manager for a medium sized company, the primary purpose of which is to provide services or products to industrial and/or domestic consumers. Some examples of such an organisation include, but are not limited to:

  Functional vs team structureexplain the difference between

functional vs. team structureexplain the difference between an organization with a functional structure and one with a

  Analyzing category of costs

Gypsy Joe's operates a chain of coffee stores. The firms pays rent of $10,000 per year for each store. Supplies are purchased as required.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd