Sony announces Smart Tennis SensorTennis racket maker Babolat introduced its smart racketPlay Pure Drive in 2013. Smash and Shot Stats soonfollowed. Now Sony is partnering with Wilson to makeSmart Tennis Sensor, a device that sits at the bottom of aracket's handle and tracks every metric and statistic that atennis player or coach could need.Source: Gizmag August 22, 2014Explain why the economic profit that Babolat and Sonymake in this market is likely to be temporary.Draw a graph to illustrate the outcome in the long run.Show the excess capacity and markup in the long run.Babolat's and Sony's economic profit from smart rackets islikely to be temporary becauseOA. other firms will enter the market and demand forrackets made by Babolat and Sony will decreaseOB. the number of tennis players is likely to decreaseOC. other firms will enter the market and the supply ofsmart rackets made by Babolat and Sony willdecreaseSelected:none6Oll&7O*8220200-180-160-140-120-100-80-60-40-20-0-0Price and cost (dollars per smart racket)9>>> Draw only the objects specified in thequestion.MCMRD40 80 120 160 200 240 280 320 360 400 44Quantity (thousands of smart rackets per year)Delete Clear0ATCNextxCanvassupportd?BES Sony announces Smart Tennis SensorBabolat's and Sony's economic profit from smart rackets islikely to be temporary becauseOA. other firms will enter the market and demand forrackets made by Babolat and Sony will decreaseOB. the number of tennis players is likely to decreaseOC. other firms will enter the market and the supply ofsmart rackets made by Babolat and Sony willdecreaseOD. eventually Babolat and Sony will find somethingelse to produce and will leave the marketThe graph shows the demand curve, the MR curve, and thecost curves for a producer of smart rackets in long-runequilibrium.Draw the point that shows the firm's profit-output and price. Label it 1.Draw the point that shows the output and average total costat the efficient scale. Label it 2.Draw a horizontal arrow that shows the firm's excesscapacity. Label it Excess capacity.Draw an arrow at the quantity produced to indicate themarkup. Label it markup.6OOll&7*8220200-180-160-140-120-100-80-60-40-20-Price and cost (dollars per smart racket)9MCMRD0-0 40 80 120 160 200 240 280 320 360 400 44Quantity (thousands of smart rackets per year)>>> Draw only the objects specified in thequestion.✓ATCNextCanvas.support ad?ES

Monopolistic competition is where there are numerous sellers selling homogeneous but separated…

Sony announces Smart Tennis Sensor Tennis racket maker Babolat introduced its smart racket Play Pure Drive in 2013. Smash and Shot Stats soon followed. Now Sony is partnering with Wilson to make Smart Tennis Sensor, a device that sits at the bottom of a racket's handle and tracks every metric and statistic that a tennis player or coach could need. Source: Gizmag August 22, 2014 Explain why the economic profit that Babolat and Sony make in this market is likely to be temporary. Draw a graph to illustrate the outcome in the long run. Show the excess capacity and markup in the long run. . 220- 200- 180- 160- 140- 120- 100- 80- 60- Price and cost (dollars per smart racket) MC ATC

Sony announces Smart Tennis Sensor Tennis racket maker Babolat introduced its smart racket Play Pure Drive in 2013. Smash and Shot Stats soon followed. Now Sony is partnering with Wilson to make Smart Tennis Sensor, a device that sits at the bottom of a racket's handle and tracks every metric and statistic that a tennis player or coach could need. Source: Gizmag August 22, 2014 Explain why the economic profit that Babolat and Sony make in this market is likely to be temporary. Draw a graph to illustrate the outcome in the long run. Show the excess capacity and markup in the long run. . 220- 200- 180- 160- 140- 120- 100- 80- 60- Price and cost (dollars per smart racket) MC ATC

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 39P: The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total...

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