question archive Suppose that the fixed startup costs (to build the factory and buy equipment) for a firm producing MP3 players, a differentiated good, is $250,000
Suppose that the fixed startup costs (to build the factory and buy equipment) for a firm producing MP3 players, a differentiated good, is $250,000
Subject:MarketingPrice:2.88 Bought3
Suppose that the fixed startup costs (to build the factory and buy equipment) for a firm producing MP3 players, a differentiated good, is $250,000. Variable costs (labor and materials) are $10 per MP3 player produced.
The market price in dollars is given by P = 10 + (1n1n), where nn equals the number of firms serving the market. Assume that each firm serves an equal fraction of the market.
Suppose that the country Gamma has a population of 10,000 people. Find the number of firms producing MP3 players under autarky and the equilibrium price.
