Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Two firms compete in a homogenous product market where the inverse demand function is P = 10 - 2Q (quantity is measured in millions). Firm 1 has been in business for 1 year, while firm 2 just recently entered the market. Each firm has a legal obligation to pay one year's rent of $1million regardless of its production decision. Firm 1's marginal cost is $2, and firm 2's marginal cost is $6. The current market price is $8 and was set optimally last year when firm 1 was the only firm in the market. At present, each firm has a 50 per cent share of the market.
a. Why do you think firm 1's marginal cost is lower than firm 2's marginal cost?
b. Determine the current profits of the two firms.
c. What would happen to each firm's current profits if firm 1 reduced its price to $6 while firm 2 continued to charge $8?
d. Suppose that, by cutting its price to $6, firm 1 is able to drive firm 2 completely out of the market. After firm 2 exists the market, does firm 1 have an incentive to raise its price? Explain.
e. If firm 1 engaging in predatory pricing when it cuts its price from $8 to $6? Explain.
Bull Bay Ltd. Manufacturers two types of surfboard, "Winner" and "Surf King", whose selling prices are $300 and $900 respectively. Each surfboard passes through two manufacturing d
Single Limiting Factor Where a single limiting factor exists for the decision making sequence may be implemented given as:- - Compute the contribution per unit of limiting
what are the advantages and disadvantages of marginal costs plus a fixed lump-sum fee?
Purpose of Cost Estimation In estimating it assists the future expenditure as cost prediction like the expenditure will depend upon the cost of the respective activities a)
sums with solution of marginal costing
Prime Essentials Limited is a small private corporation. The owner plans to approach the bank for an additional loan or a line of credit to facilitate expansion. The company bookke
As the Junior Bank Clerk of a business, one of your monthly tasks is to prepare the bank reconciliation statement. At the month ending 31 January 2012, the bank statement has be
1. A company is considering a project that requires an initial investment of $100 million and will pay $20 million of each of the next 10 years, and nothing thereafter. The company
what is regression analysis and its applicability to the course of cost accounting
Partner A (50%) Partner B (50%) sharing profits equally New partner introduced $13,000 total cash including $3000 as goodwill which is raised to its full value. Partner C
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd