Please answer this ASAPThanks Ex 3.1Use the previous text.The general director must decide:2000 units of product B is sold at the price of 24€ If the principle competitor cuts the price to 20€, Beta could havetwo alternatives:a. Take price unchanged, sell only 1500 units of B;b. Cur the price to 20€ and continue to sell 2000 units of B.What decision is the most convenient for the company? Ex 3.2Use the previous text.Calculate the Breakeven point revenue for the company, assuming a product mix of 35%, 40% and 25%, and price20 €, 24 € and 14 €.

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Ex 3.1 Use the previous text. The general director must decide: 2000 units of product B is sold at the price of 24€. If the principle competitor cuts the price to 20€, Beta could have two alternatives: a. Take price unchanged, sell only 1500 units of B, b. Cut the price to 20€ and continue to sell 2000 units of B. What decision is the most convenient for the company?

Ex 3.1 Use the previous text. The general director must decide: 2000 units of product B is sold at the price of 24€. If the principle competitor cuts the price to 20€, Beta could have two alternatives: a. Take price unchanged, sell only 1500 units of B, b. Cut the price to 20€ and continue to sell 2000 units of B. What decision is the most convenient for the company?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 9MC

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Question AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd = 250 – 50 P         where P is Price and Q are packs of vaccines in ‘000 Total Cost Function estimated by the firm is     TC = 15 + 0.5Q      where Q is monthly output. a. What is the market structure of AVAC? State its characteristics. b. To maximize profit, What will be the optimum price and how many packs of Vaccine should the firm produce and sell per month? If this number of packs is produced and sold, what will be the firm’s monthly profit? c. Using available information, draw AVAC’s demand, marginal revenue and marginal cost curves in a graph and clearly label thefirm’s profit maximizing price, quantity and profit. Do you observe any welfare loss? If so, also indicate and label the area on the graph. d. Assume all other pharmaceutical firms in the market start producing the Vaccine and the market becomes competitive. What will be the impact on price and marginal…