You are the manager of Taurus Technologies, and your sole competitoris Spyder Technologies. The two firms' products are viewed as identicalby most consumers. The relevant cost functions are (Q) = 4Qj, and theinverse market demand curve for this unique product is given by P=940 -3 Q. Currently, you and your rival simultaneously (butindependently) make production decisions, and the price you fetch forthe product depends on the total amount produced by each firm.However, by making an unrecoverable fixed investment of $2,000,Taurus Technologies can bring its product to market before Spyderfinalizes production plans. (Assume Taurus Technologies is the leader inthis scenario.)What are your profits if you do not make the investment?What are your profits if you do make the investment?Instructions: Do not include the investment of $2,000 as part of yourprofit calculation.$%24

A) Here, in the case that the firm don't take the venture/investment the benefit would be 54080 for…

"o firms products are w unt cost functions are C For this unique product pur rival simultaneousl on decisions, and the p tal amount produced b verable fixed investme its product to market E ume Taurus Technolog not make the investme

"o firms products are w unt cost functions are C For this unique product pur rival simultaneousl on decisions, and the p tal amount produced b verable fixed investme its product to market E ume Taurus Technolog not make the investme

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 1E

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ASAP PLZ You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 650 −3 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $1,800, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.)What are your profits if you do not make the investment? $ ____What are your profits if you do make the investment?Instructions: Do not include the investment of $1,800 as part of your profit calculation. $ ____ Should you invest the $1,800? multiple choice Yes - the benefits of establishing…
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