Determine equilibrium price and number of firms

Reference no: EM132140918

Question: Assume two countries, A and B, with sizes of domestic markets 300 million and 533 1 3 million units in annual sales, respectively. In this market, firms compete by differentiating their product, while the cost structure among the firms is largely the same. In particular, let the fixed costs of firms be $5 × 109 , or five billion; marginal cost is $17,000 per unit; and the coefficient of sensitivity b is 1/150.

(a) In the absence of international trade, determine equilibrium price and number of firms in the market in each country.

(b) Now find the number of firms and equilibrium price in the integrated market with costless crossboarder trade.

Reference no: EM132140918

Questions Cloud

Does the relationship appear to be linear : What kind of decisions could be made when examining a store's contribution to overall gross profit for the company?

Identify the major trends in the general environment : Identify the major trends in the general environment.

Websites whether they may have cyber insurance policy : Find and investigate one insurance company and determine from their websites whether they may have a cyber insurance policy.

What will happen to the price and the quantity sold : Assume the supply of plain white tee shirts is perfectly elastic, but demand has the usual downward sloping shape. Suppose the government imposes a tax per unit

Determine equilibrium price and number of firms : Assume two countries, A and B, with sizes of domestic markets 300 million and 533 1 3 million units in annual sales, respectively.

Under your trading platform structure : DESIGN and DRAW a high level “as-is” process diagram depicting how a trade would be made, under your trading platform structure.

Do you agree or disagree with accepting private funds : you are required to explain the circumstances surrounding this article. Also, be sure to address these questions in your response

Prepare a requirements management plan : Prepare a requirements management plan (RMP) that addresses the five components described in Section 5.1.3.2, PMBOK 6e.

Traditionalists prefer standard training room with stable : Traditionalists prefer a standard training room with a stable, orderly learning environment. They do not like to be put on the spot in front of other trainees.

User Account

All Pages