Estimated the market demand

Reference no: EM133440714

Assignment:

Based on our research, if we enter the market we would be competing in a competitive market.

We have estimated the market demand and market supply for "mini" espresso machines to be Qd=9000-8P and QS=600+4P. Our costs of producing the machine are TC = 10,000+ 0.25Q2.

We would like your help in determining what our profit would be, based on the current market situation, if we would become the sole producer of the "mini" espresso machines, and furthermore, what is the maximum that we should be willing to pay to purchase these other companies?

Can you please provide an analysis to determine whether it is a good idea for us to enter this competitive market and begin producing "mini" expresso machines? Second, do you suggest that we attempt to buy the other firms and become the sole producer of these machines? In both situations, we would like to know how many machines to producer, what price to charge, and what our profits would be.

Reference no: EM133440714

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