4. Suppose the market demand and supply functions are Qp = 112,500-150P and Qs 125P+ 49,250. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product. a. Determine the equilibrium price and quantity in this market. b. You've researched and found that most firms in the market currently experience costs such that TC= 1,325 +380Q-6.75Q² +0.07Q³. Determine whether or not you should enter this market. Use graphs to support your answer. (Remember that you can Format Axis and change the Minimum and Maximum Bounds of your axes to "zoom in" to a graph in Excel.) Due to unforeseen delays, you don't enter the market. However, a year later the market supply has changed to Qs = 125P+ 38,250. Are you surprised at this shift in supply? d. Given the new supply conditions, determine whether or not you should enter the market. c.

4. Suppose the market demand and supply functions are Qp = 112,500-150P and Qs 125P+ 49,250. You have just graduated and moved to this city; as a new MBA and an entrepreneur, you are considering entering the market for this product. a. Determine the equilibrium price and quantity in this market. b. You've researched and found that most firms in the market currently experience costs such that TC= 1,325 +380Q-6.75Q² +0.07Q³. Determine whether or not you should enter this market. Use graphs to support your answer. (Remember that you can Format Axis and change the Minimum and Maximum Bounds of your axes to "zoom in" to a graph in Excel.) Due to unforeseen delays, you don't enter the market. However, a year later the market supply has changed to Qs = 125P+ 38,250. Are you surprised at this shift in supply? d. Given the new supply conditions, determine whether or not you should enter the market. c.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.6IP

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Question

4. Suppose the market demand and supply functions are Qp = 112,500 - 150P and
Qs = 125P + 49,250. You have just graduated and moved to this city; as a new MBA and an
entrepreneur, you are considering entering the market for this product.
a. Determine the equilibrium price and quantity in this market.
b. You've researched and found that most firms in the market currently experience costs such
that TC = 1,325 +380Q-6.75Q2 +0.07Q³. Determine whether or not you should enter
this market. Use graphs to support your answer. (Remember that you can Format Axis and
change the Minimum and Maximum Bounds of your axes to "zoom in" to a graph in Excel.)
c. Due to unforeseen delays, you don't enter the market. However, a year later the market
supply has changed to Qs = 125P+ 38,250. Are you surprised at this shift in supply?
d. Given the new supply conditions, determine whether or not you should enter the market.

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