Home inverse demand, Management Theories

Suppose that two national champions are active in the similar industry but in two neighbouring countries. Initially, neither firm is active in the other country. They every face the following inverse demand curve: P=100-q. Their marginal costs are equal and constant at 10. They both consider entering the market in the other country. If they do so, every of them will face an inverse demand function P=20-0.2q in the foreign country. Though, if there is entry into a firm's home market by a foreign firm, the home inverse demand will no longer be P=100-q, but it will then change to become P=75-0.75q. Note: the demand curves are firm demand curves, not market demand curves.

a)   Measure the firms' optimal quantity if they remain active only in their respective home country. Give the corresponding price and profit.

b)   Measure the firms' optimal export quantity (and corresponding price in the foreign market) if they choose to enter their respective foreign market. Suppose that price discrimination is possible, i.e., that it is possible to sell at a lower price in the export market. What is the additional profit earned in the export market?

 

Posted Date: 3/19/2013 4:04:40 AM | Location : United States







Related Discussions:- Home inverse demand, Assignment Help, Ask Question on Home inverse demand, Get Answer, Expert's Help, Home inverse demand Discussions

Write discussion on Home inverse demand
Your posts are moderated
Related Questions
Question 1: (a) The process of adapting policy to make it work at the operational level of the organisation has been described as ‘street-level bureaucracy'. Identify 4 featur

John Kamangu, manager of a Nairobi City branch office of the state department of motor vehicles, attempted to do an analysis of the driver's license renewal operations. various ste

Q. Distinguish between line and staff people? Line people are directly correlated with the achievement of organizational goals. Staff people are indirectly correlated with t


why is communication important in a restaurant


Panel Design: A permanent set of experimental units used in marketing research investigations is known as panel .Panel can be used both for exploratory and conclusive research

#question.what is its shape locations and functions.

How will you influence people to strive willingly for group objectives in your organisation(Target based industry) ? apply your interpersonal influence through communication proces

DEFNITIONS of ENVIORNMENT-ORIENTED  The accomplishment of work has a great concern with a proper environment in an organization. Managers have the responsibility to make and m