#7. Your company sells widgets. There is only one other firm in the market: Bear Widgets. Demand for your product depends upon your price, your quantity, and the price that Bear Widgets charges (Pgear). You think that Bear Widgets will either charge $10 or $20. What should you do if their price will be $20?
#7. Your company sells widgets. There is only one other firm in the market: Bear Widgets. Demand for your product depends upon your price, your quantity, and the price that Bear Widgets charges (Pgear). You think that Bear Widgets will either charge $10 or $20. What should you do if their price will be $20?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![#7. Your company sells widgets. There is only one other firm in the market: Bear Widgets.
Demand for your product depends upon your price, your quantity, and the price that Bear
Widgets charges (Pgear). You think that Bear Widgets will either charge $10 or $20. What
should you do if their price will be $20?
Demand: P = 50 – Q + 0.5P3ear
Marginal costs: MC = 2Q
%3D
a. Produce Q = 20
b. Produce Q = 18.33
c. Produce Q = 16.67
d. Produce Q = 15
%3D
e. Produce Q = 13.75](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab8fb356-539a-49f5-8814-e3cdd7231355%2Fff5c1bd6-667a-4a75-86e8-e23df203fafa%2F9r3gqpa_processed.png&w=3840&q=75)
Transcribed Image Text:#7. Your company sells widgets. There is only one other firm in the market: Bear Widgets.
Demand for your product depends upon your price, your quantity, and the price that Bear
Widgets charges (Pgear). You think that Bear Widgets will either charge $10 or $20. What
should you do if their price will be $20?
Demand: P = 50 – Q + 0.5P3ear
Marginal costs: MC = 2Q
%3D
a. Produce Q = 20
b. Produce Q = 18.33
c. Produce Q = 16.67
d. Produce Q = 15
%3D
e. Produce Q = 13.75
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