1. You have returned to your analyst position at the boutique investment banking firm of Dewey, lCheatam, & Howe [DCH). Another analyst at DCH, remembering your expertise with respect to the peanut butter indistry, has asked for your help (Since he has an MBA from a business SL'hDDl that is located near Cambridge, Massachusetts, he may need some analytical help.) He has heard rumors that a study at the Yale Medical School is going to reveal that peanut butter may cause premature hair loss in men and women. He believes that almost all consumes view peanut butte. as a commodity and that the peanut butter industry is competitive. He wants to lmo w how this study will affect prices and quanties of peanut butter, the number of companies in the industry, and the prolitability of the companies in the industry, in both the short run and the long run. a. What will you tell him? b. How would your answer differ if you believed that consumers have moderate brand preferences among the various companies peanut butter offerings, rather than viewing peanut butter as a commodity? 2. The NFTishent Widget Corp. [NWCJ has a monopoly in producing and selling widgets and faces the following demand relationship for its widgets {where Q is the quantity per year and i is the price in U.S.$): Q 3: 10000 100p, equivalently, '.' = 100 0.01Q The company has xed costs of $140,000.00 and variable costs of $20.00 per widget. a. What is the profit maximizing level of productionr'sales for This company? What is the price? What are its prots? b. The senior management of WC, concerned that prots may not be as high as they could be, hires a costing consultancy rm - Chayne, Saw 8: Allen [whose nickname is "Chainsaw Al", or CA) -- to assess NWC's costs. CA discovers that the company has been misinterpreting its xed and variable costs. Consequently, CA concludes that NWC's true xed costs are only $60,000, while its one variable costs are $40.00 per widget. On the assumption that CA is correct, what would your answers to {a} be? Explain why the new answers are different (or why they are not). 3. The global pharmaceuticals giant, BigPharma (BP), has had great success with Xamoff, an overthe counter medicine that reduces examrelated anxiety. A patent currently protects Xamoff from competition, although rumors persist that similar products are in development