User Account

All Pages

Find gillette profit-maximizing price and quantity

Assignment Help Business Economics
Reference no: EM132284401

Imagine that Gillette has a monopoly in the market for razor blades in Mexico. The market demand curve for blades in Mexico is P = 968 - 20Q, where P is the price of blades in cents and Q is annual demand for blades expressed in millions. Gillette has two plants in which it can produce blades for the Mexican market: one in Los Angeles and one in Mexico City. In its L.A. plant, Gillette can produce any quantity of blades it wants at a marginal cost of 8 cents per blade. Letting Q1 and MC1 denote the output and marginal cost at the L.A. plant, we have MC1(Q1) = 8. The Mexican plant has a marginal cost function given by MC2(Q2) = 1 + 0.5Q2.

a) Find Gillette's profit-maximizing price and quantity of output for the Mexican market overall. How will Gillette allocate production between its Mexican plant and its U.S. plant?

b) Suppose Gillette's L.A. plant had a marginal cost of 10 cents rather than 8 cents per blade. How would your answer to part (a) change?

Reference no: EM132284401

Questions Cloud

Explain and summarize the classical view of the economy : Which U.S. major political party is generally associated with Classical principles?
Keynesian critique of the classical principles : Include in your answer Say's Law, prices, interest rates and wages. Which U.S. major political party is generally associated with Keynesian principles?
Explain the economic term for that law : Explain the economic term for that law and the problem that economists would have with it. Work in the principles of demand, supply, surplus and shortage
Describe the impact this had on nurse engagement : Identify a specific instance from your own professional experience in which the values of the organization and the values of the individual nurses did.
Find gillette profit-maximizing price and quantity : Find Gillette's profit-maximizing price and quantity of output for the Mexican market overall. How will Gillette allocate production between its Mexican plant
Represent their place in the product life cycle : Choose four products (not Tide) to represent their place in the product life cycle.
The market demand is : In this market there are only two identical firms, no threat of a new entry, and the output is homogenous. The market demand is
Federal reserve continue to carry out open market operations : Suppose the U.S. government paid off all its debt. Could the Federal Reserve continue to carry out open market operations?
Specializing in virtual reality and computer visualizations : Visualize This (VT) is a small start-up company specializing in virtual reality and computer visualizations.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd