Price and output determination in monopoly

Reference no: EM1316031

RainAway, Inc., makes polymers used to coat the windshields of car's, planes, and boats that makes them slick enough for rain to slide off without wipers. During recent years, its unique windshield coating product has successfully exploited a small but profitable niche in the market. The company's monopoly position in this market niche is now threatened by a competitor's announcement of a new product with capabilities similar to those of the RailAway product.

A. Complete the following table based on the RainAway product's price, output and costs per year:

xCase Output (000)	Price	Total Revenue ($000)	Marginal Revenue ($000)	Total Cost ($000)	Marginal Cost ($000)
0	$15			$1
1	14			13
2	13			25
3	12			36
4	11			44
5	10			55

B. While RailAway still enjoys a monopoly position, what is their output, price, and profit at the profit-maximizing activity level?

C. What are the output, price, and profit for this product if a monopolistically competitive equilibrium evolves in this market following the successful introduction of the competitor's product? (Assume similar cost "conditions for each firm).

Reference no: EM1316031

Questions Cloud

Relationship among variables is sufficient to warrant : Describe the data appear the strength of the relationship among variables is sufficient to warrant using linear regression forecasting.

Calculation of return on investment and residual income : Calculation of return on investment and residual income and Calculate the missing amounts for each division

Compute the value of investment : Compute the value of investment - Date of purchase of the capital and Date that the capital starts to accumulate interest

Multiple linear regression equation using mega stats : Use MegaStat's output for multiple regression to determine the multiple regression equation

Price and output determination in monopoly : RainAway, Inc., makes polymers used to coat the windshields of car's, planes, and boats-Complete the following table based on the RainAway product's price, output and costs per year:

Determine the expected return of portfolio : Determine the expected return of portfolio on the facts narrated - What is the expected return on a portfolio that is equally invested in the two assets?

Estimating probability based on the discrete distribution : The casino game craps is based on rolling two dice. Here is the assignment of probabilities to the sum of numbers on the up face when two dice are rolled:

Determine the average flow time from the cycle inventory : Computing Economic order quantity for inventory for minimizing costs and determine the average flow time from the cycle inventory?

International business comprises currency market : International business comprises currency market and what should be the price of the same disc in Mexico

User Account

All Pages