Determine apples optimal output

Assignment Help Business Economics

Reference no: EM13800519

Consider the market for music downloads. The market demand curve is given by P=10-(1/6)Q

Where Q is the number of downloads sold per hour and P is the price per download. Apple is the dominant firm in this market with constant marginal costs MC=6. There are three follower firms that also produce music downloads, each with marginal costs given by MC=6+(1/2)Q, where Q is the output per follower firm per hour. Determine Apples optimal output, the price they will charge, and the output for each of the follower firms.

Reference no: EM13800519

Questions Cloud

Incentive plan align the employees incentives with the firms : Part of a worker’s pay on an automobile assembly line is based on the number of cars in a pay period that come off the worker’s line and pass inspection. The remaining portion of the worker’s pay is an hourly wage that is fixed and only depends on th..

Applying the concept of diminishing marginal utility : The government wants to make medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month ..

Substitution and income effects of a change in price of good : Substitution and income effects of a change in price of a good may be used to explain the:

Submitted bids to develop a new video display technology : Two competing companies have submitted bids to develop a new video display technology. The yearly development cost of Alpha expressed in actual dollars will be $150,000 the first year and increase by 4% per year over the five year contract. Beta has ..

Determine apples optimal output : Consider the market for music downloads. The market demand curve is given by P=10-(1/6)Q. Where Q is the number of downloads sold per hour and P is the price per download. Apple is the dominant firm in this market with constant marginal costs MC=6.

Successfully collude to fix price at profit maximizing level : The demand curve for higher education in Tallahassee is P=120-2Q. Assume the only two colleges in town are FSU and FAMU. Each university faces the cost function TC=6Q. Both colleges get together and successfully collude to fix price at a profit maxim..

Transactions involving interest include which of elements : Transactions involving interest include which of these elements?

If a price is above equilibrium : If a price is above equilibrium,

Preferred customer and the customer is charged at cost : An apparel manufacturing plant has estimated the variable cost to be $4.50 per unit. Fixed costs are $500,000 per year. Forty percent of its business is with one preferred customer and the customer is charged at cost. If 150,000 total units are sold ..

User Account

All Pages