Consider a product X that nobody would buy for $700 or more. Conversely, for every $2 that the price drops, the demand for this product will increase by 1 unit. The variable cost per unit of product X is $100. 1a) Let p indicate the price of the product and q quantities demanded by the market. Which equation better describes the relationship between p and d? a) q = 600p – 2p2 b) q = 700 – 2p – 100 c) q = (700 - p) / 2 d) q = 2 – 700p 1b. If Company A is a monopolist supplying product X, which quantity p maximizes Company A's profit? a) 38 b) 75 c) 19 d) 150 1c. Consider a von Stackelberg Duopoly. If a second company, Company B, also supplies product X and enters the market to compete with Company A. What is the expected price of the product? a) $174 b) $400 c) $250 d) $93
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Statement) Consider a product X that nobody would buy for $700 or more. Conversely, for every $2 that the
1a) Let p indicate the price of the product and q quantities demanded by the market. Which equation better describes the relationship between p and d?
a) q = 600p – 2p2
b) q = 700 – 2p – 100
c) q = (700 - p) / 2
d) q = 2 – 700p
1b. If Company A is a monopolist supplying product X, which quantity p maximizes Company A's profit?
a) 38
b) 75
c) 19
d) 150
1c. Consider a von Stackelberg Duopoly. If a second company, Company B, also supplies product X and enters the market to compete with Company A. What is the expected price of the product?
a) $174
b) $400
c) $250
d) $93
1d. Consider a von Stackelberg Duopoly. If a third company, Company C, also supplies product X and enters the market to compete with Company A and Company B. How much profit can Company C receive?
a) $5,750
b) $2,875
c) $11,500
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