You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by consumers. The relevant total cost functions are C(Qi)=2(Qi)for each firm, and the inverse market demand curve for this unique product is given by P = 50 – Q, with Q the total quantity. Currently, you and your rival simultaneously (but independently) make production decisions. b. Suppose by making an unrecoverable fixed investment of $40, Taurus Technologies can bring its product to market before Spyder finalizes its production plans. If so, what is your quantity and profit? Should you make the investment of $40? a. What is the current optimal quantity and profit of Taurus Technologies?
You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by consumers. The relevant total cost functions are C(Qi)=2(Qi)for each firm, and the inverse market demand curve for this unique product is given by P = 50 – Q, with Q the total quantity. Currently, you and your rival simultaneously (but independently) make production decisions. b. Suppose by making an unrecoverable fixed investment of $40, Taurus Technologies can bring its product to market before Spyder finalizes its production plans. If so, what is your quantity and profit? Should you make the investment of $40? a. What is the current optimal quantity and profit of Taurus Technologies?
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