You Are the Manager of a Firm in a New

question 32

Essay

You are the manager of a firm in a new industry.You have gotten the jump on the only other producer in the market.You know what your competitor's cost function is,and it knows yours.Your products,although different to experts,are indistinguishable to the average consumer.Your marketing research team has provided you with the following market demand curve:
Q = 1,250 − .5P.Your cost function is C_A(Q_A)= 8Q_A.Your competitor's cost function is C_B(Q_B)= 6Q_B.Your diligent effort will allow you to decide how much of your product to provide and will allow you to place it on the market shortly before your competitor will be able to make its product available for sale.What output level will you choose,and what price will you charge?

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Definitions:

Testcross

A genetic cross between a homozygous recessive individual and an organism of unknown genotype, to determine the unknown organism’s genotype based on the offspring’s phenotypes.

Homozygous Recessive

Referring to an individual carrying two copies of a recessive allele for a particular trait, which will be expressed in the organism's phenotype.

Dominant Trait

A genetic trait that is expressed in an organism even when only one copy of the gene responsible for the trait is present.

CFTR Gene

A gene that provides instructions for making a protein that acts as a channel for the movement of chloride ions across cell membranes, mutations of which can lead to cystic fibrosis.