You manage a company that competes in an industry that is comprised of 3 equal-sized firms that produce similar products. A recent industry report indicates that the market is fairly saturated, in that a 10 percent industry-wide price increase would lead to a 22 percent decline in units sold by all firms in the industry. Currently, Congress is considering legislation that would impose a tariff on a key input used by the industry. Your best estimate is that, if the legislation passes, your marginal cost will increase by 1 dollar. Based on this information, what price increase would you recommend if the tariff legislation is passed by Congress? Instructions: Enter your response rounded to the nearest penny (two decimal places).

You manage a company that competes in an industry that is comprised of 3 equal-sized firms that produce similar products. A recent industry report indicates that the market is fairly saturated, in that a 10 percent industry-wide price increase would lead to a 22 percent decline in units sold by all firms in the industry. Currently, Congress is considering legislation that would impose a tariff on a key input used by the industry. Your best estimate is that, if the legislation passes, your marginal cost will increase by 1 dollar. Based on this information, what price increase would you recommend if the tariff legislation is passed by Congress? Instructions: Enter your response rounded to the nearest penny (two decimal places).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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