What changes in sales would you anticipate if you were the manager of a Dodge/Plymouth franchise? Why?

What changes in sales would you anticipate if you were the manager of a Dodge/Plymouth franchise? Why? Answer: Other things equal, your sales would rise. However, given the oligopolistic nature of the industry, you should anticipate that automakers like General Motors and Ford will likely counter with similar incentive programs, which will mitigate to some extent the sales increase you otherwise would have enjoyed. Orion and Zeda are the only producers of a unique product that sold in a market where the inverse demand curve is P = 200 – 2Q . The firms produce identical products and have identical cost functions given by C (Qi ) = 4Qi . The managers of each firm must decide on their outputs on Monday morning and then bring products to market by noon. A. What is each firm”s marginal revenue? Marginal cost? B. Equate each firm”s marginal revenue to marginal cost. C. Use your result in part (b) to solve for each firm”s reaction function. D. Use your results in part (c) to solve fo

 
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