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(a) Manufacturer is first and only to create product. Demand

Paper help Economics (a) Manufacturer is first and only to create product. Demand

Economics

(a) Manufacturer is first and only to create product. Demand

(a) Manufacturer is first and only to create product. Demand is: Qd=12500-0.25P. Decides to price ca… Show more (a) Manufacturer is first and only to create product. Demand is: Qd=12500-0.25P. Decides to price cars at 34,000$ in order to maximize profits. Faces constant marginal cost. Optimal Production level, Producer surplus, and profit? (b) based on success, large number of other manufacturers started own version of product. Improvements have lowered marginal costs by 5% for all manufacturers. New demand function is: Qd=18000-0.2P. Effect on price? Producer and consumer surplus now? • Show less

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