If BMW were forced to charge the same price in each market, what would be the quantity sold in each market, the equilibrium price, and the company's profit? (round dollar amounts to the nearest penny and quantities to the nearest integer)
In Europe
In United States equilibrium quantity is 550,000 cars at an equilibrium price of $47,500
BMW makes a total profit of $15.125 billion.
I Need help with this part:
If BMW were forced to charge the same price in each market, what would be the quantity sold in each
To solve this problem, first find the combined market demand by horizontally summing the European and US demand
Q= QE+QU = 4,000,000−100PE+1,500,000−20PU=5,500,000−120P
Thus, inverse demand is:
P=(5,500,000/120)−(1/120)Q
The equilibrium price would be $_______ and BMW would sell _____cars in Europe and _____cars in the United States.
BMW makes a profit of $_____.
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