What occurs when a new technology makes another one obsolete

Assignment Help Business Economics
Reference no: EM135388

Explain what occurs when a new technology makes another one obsolete in terms of economic profit. Consider firm A to be an existing firm using the old technology. Firm B is the new firm with the new technology. Firm A earned positive profits for years, but with the entrance of Firm B, Firm As goods and services are no longer desired.

Assume that you are in the business of building houses. You have analyzed the market carefully, and you know that at a price of $120,000, you will sell 800 houses per year. In addition, you know that at any price above $120,000, no one will buy your houses because the government provides equal-quality houses to anyone who wants one at $120,000. You know that for every $20,000 you lower your price, you will be able to sell an additional 200 units. For example, at a price of $100,000, you can sell 1,000 houses, at a price of $80,000, you can sell 1,200 houses, and so on.

Reference no: EM135388

Questions Cloud

Factors that affect pay differentials : What are the factors that affect pay differentials? How does each factor increase or decrease relative wages?
Prepare an invoice : How do you take a known dollar value such as $240.00, back out the sales taxes from the known values using the States sales tax
Describe a skimming price and a penetration price : Describe a skimming price and a penetration price, and advise them whether they should charge a skimming price or a penetration price, with supportive reasoning for and against each pricing alternative.
What occurs when a new technology makes another one obsolete : Explain what occurs when a new technology makes another one obsolete in terms of economic profit.
What occurs when a new technology makes another one obsolete : Explain what occurs when a new technology makes another one obsolete in terms of economic profit.
How can 2 countries both be better off as a result of trade : How can two countries both be better off as a result of trade? How can tariffs protect U.S. jobs? Do tariffs lead to a net increase in jobs?
Write an e-business plan for an e-commerce site : You are required to write an e-business plan for an e-commerce site and specify the necessary system requirements to develop it.
China has continued to lag in information technologies : China has continued to lag well behind the rest of the world in information technologies
Calculate the mean and standard deviation : Calculate the mean and standard deviation and Based on these statistics, describe how these anthropometric data compare to the US male and Chinese female populations.

Reviews

Write a Review

 

Business Economics Questions & Answers

  The law of demand states that other things equal

The law of demand states that other things equal

  What data organization needs in order to make good decision

What data the organization needs in order to make good decisions and how the use of macroeconomic indicators enables organizations to improve their forecasts of the key decision-making data.

  Draw a graph of the market for chewing gum

Draw a graph of the market for chewing gum. What are the equilibrium price and quantity? Mark the equilibrium price and quantity in the graph.

  The coca-cola company has 40% of the cola market.

The Coca-Cola Company has 40% of the cola market. Determine the probability that a sample proportion

  Determine cost to government of buying firms unsold units

Determine the cost to the government of buying firms unsold units

  Aggregate demand and supply

The vertical long run AS curve compatible with classical economics implies that AD only determines the price level

  Define mercantilism

Define Mercantilism, Pick a country and talk about the products they import and export with the U.S.A. Also talk about the composition of trade with relation of abundance of the two countries

  Calculate the price elasticity of demand for newtons donuts

Calculate the price elasticity of demand for Newton's Donuts

  Define culture in your response

Explain the role culture may play in influencing entrepreneurship both at the individual and social level. Define culture in your response.

  Cost leadership approach implicates

The cost leadership approach implicates competing by having a lower cost than one's competitors

  Entrepreneurship and capital venturing

Describe the Schumpeterian notion of "creative destruction"

  A local community voting to raise property taxes

A local community voting to raise property taxes to increase school expenditures

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