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Market demand and marginal revenue relations for Glove-Box units are:P=$500,000-$250Q;MR=$500,000-$500Q;OSHA mandates that GB must install new eqpmt that will increase the $200,000 marginal cost of mfg to $250,000 per unit.The fixed expenses of $50million per yr will be unaffected.

a. Compute GB's profit maximizing price/output combination and economicprofit before the installation of the OSHA mandated equipmt.

b. Compute the same after the osha guidelines have been met.

c. Who pays the economic burden of meeting OSHA guidelines.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M937588

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