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Author Question: A group of friends recently started manufacturing specialty T-shirts. The business has grown ... (Read 111 times)

dakota nelson

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on: Jul 1, 2018
A group of friends recently started manufacturing specialty T-shirts. The business has grown rapidly, with monthly production up from 50 to 250 in the first 6 months. During this same period, average production cost has been cut in half.
 
  The firm's long-run average cost curve over this range of output A) is downward sloping.
  B) is upward sloping.
  C) is horizontal.
  D) may be any of the above.

Question 2

Suppose two firms with differentiated products are competing on price. The reaction curve for Firm 1 is P1 = 4 + 0.5 P2, and the reaction curve for Firm 2 is P2 = 4 + 0.5P1. What is the equilibrium price outcome in this market?
 
  A) P1 = P2 = 4
  B) P1 = P2 = 6
  C) P1 = P2 = 8
  D) P1 = 6 and P2 = 8


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cdmart10

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Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

C


dakota nelson

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Reply 2 on: Jul 1, 2018
YES! Correct, THANKS for helping me on my review

amandanbreshears

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Reply 3 on: Yesterday
Wow, this really help

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