Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

problem about Market Analysis

Gray Computer Inc located in Colorado Springs, Colorado is a privately held producer of high speed electronic computers with immense storage capacity and computing capability. Although Gray's market is restricted to industrial users and a few large government agencies (e.g., Department of Health, NASA, and the National Weather Service), the company has profitably exploited its market niche. Suppose a potential entrant into the market for supercomputers has asked you to evaluate the short and long run potential of this market. The following market demand and cost information has been developed:

P= $62 - $1.5Q
MR= triangle TR/triangle Q = $54 - $3Q
TC=$200 + $6Q + $0.5Q squared
MC=triangle TC/triangle Q=$6+$1Q

Where P is price, Q is units measured by the number of supercomputers, MR is marginal revenue, TC is total costs including a normal rate of return, MC is marginal cost and all figures are in millions of dollars.

A. These demand and cost data are descriptive of Gray's historical experience. find out output,price, and economic profits earned by Gray computer as a monopolist. What is the point price elasticity of demand at this output level

B. find out the range within which a long run equilibrium price output combination would be found for individual firms if entry eliminated Grays economic profits. This is assuming that the cost function is unchanged and the high price/low-output solution results from a parallel shift in the demand curve while the low price/high output solution results from a competitive equilibrium.

C. What is the potential overall market size for supercomputers if the point price elasticity of demand find outd in part A is a good estimate of the relevant arc price elasticity?

D. If no other near term entrants are anticipated, should the company enter the market for supercomputers?

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M925507

Have any Question? 


Related Questions in Business Economics

Assessment task descriptiontopicstudents will be required

ASSESSMENT TASK: DESCRIPTION Topic Students will be required to choose a specific enterprise (it should ideally be one with which they are somewhat familiar) and develop a sustainability indicators monitoring system for ...

What is the relationship between economy business and

What is the relationship between economy, business, and society? -6 page essay (includes only ONE page for references,but the cover page is not included in the 6 page requirement) -Double spaced -APA format

Assignmentarticle reportplease select a marketing topic you

Assignment Article Report Please select a marketing topic you learned and then search in the Wall Street Journal (either online or hardcopy *) and select an article about that topic within the last 12 months. To do this, ...

In the united states as in most countries we value the

In the United States, as in most countries, we value the benefits of a free and competitive market. This suggests an interesting question: what if there were to be no Antitrust laws or other regulations on business activ ...

Assignmentinstructions1 select an illegal activity and

Assignment Instructions 1. Select an illegal activity and transform/mask its' true purpose with the disguise of a legitimate business operation. In other words, create a start-up business that would be viewed as a legal ...

Question 1 for the following situations calculate

Question 1 . For the following situations, calculate elasticity of demand and comment on the answer.                             When the price of commodity X was Rs. 12/-, 40 units it were demanded. When the price decre ...

1 there is a small country whose domestic demand and supply

1) There is a small country whose domestic demand and supply for a good x are given below (where P is the price of X) [drawing a demand and supply graph may be helpful to you, but is not required.] D: P=100-Q S: P=10+2Q ...

Chapter 1 managing changeq1 figure 176 shows how bad an

Chapter 1 Managing change Q1 Figure 1.76 shows how bad an implementation can become. Action needs to be taken to prevent this kind of situation. What would you recommend should be done? Q2 You are the project manager for ...

Free trade and restricted trade - benefits and cost1-2

Free Trade and Restricted Trade - Benefits and Cost 1-2 paragraphs APA format/ no plagarism Using your own words, define both free and restricted trade. What do you feel are the benefits and the cost to having free trade ...

Assignmentpart idirections please write a paper that is at

Assignment PART I Directions: Please write a paper that is at least two to three pages in length in which you address the questions below. Write your paper in APA format with at least one cited scholarly reference. Revie ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen