SunCenter Is the Only Firm in Its Industry

question 16

Essay

SunCenter is the only firm in its industry. Currently, SunCenter charges $75 per unit, a price well in excess of its marginal cost of $5 per unit, and earns $70 million per year in profit. According to a trusted source, the manager of SunCenter learned that a new firm is contemplating entering the market. This would reduce its profit to $40 million per year. If SunCenter expanded its output and lowered its price to $50, the entrant would find it unprofitable to enter the market, and SunCenter would earn profits of $50 million per year for the indefinite future.
a. What pricing strategy is the manager of SunCenter considering?
b. If SunCenter was able to credibly commit to maintain a price of $50, would it be a profitable strategy? Explain.

Recognize safety precautions related to truck tire inflation and handling.

Differentiate between various types of truck wheels and their applications.

Determine the causes of tire wear and appropriate corrective actions.

Comprehend the regulations related to truck tire maintenance and replacement.

---

Definitions:

Neutral

A state or position of not supporting or helping either side in a conflict or disagreement.

Pro-German Sympathies

Sentiments of support or favoritism towards Germany and its policies, particularly noted during the periods surrounding the World Wars.

Jeannette Rankin

The first woman ever elected to the United States Congress, serving as a Representative from Montana and a lifelong advocate for peace and women's rights.

Woman

An adult female human being.