3) Altamira S.E. intends to enter a new geographic market for smart meter systems. The product managers are discussing the conditions for profitable entry. The company's Market Research Unit (MRU) has calculated from internal sources the estimated total cost of production and sales. Production is batched-based and proceeds in steps of 500 units (see the following table). Volume produced (# units) Total cost (in {) 0 100,000 500 127,125 1,000 149,000 1,500 166,375 2,000 180,000 2,500 190,625 3,000 199,000 3,500 205,875 4,000 212,000 4,500 218,125 5,000 225,000 5,500 233,375 6,000 244,000 6,500 257,625 7,000 275,000 7,500 296,875 8,000 324,000 8,500 357,125 9,000 397,000 9,500 444,375 10,000 500,000 The market analysis has identified several competitors offering qualitatively similar systems. a. At what expected post-entry price should Altamira S.E. refrain from entering? (3 points) b. The MRU forecasts q = 2,000 units as Altamira S.E.'s sales potential in the short run post entry. At what market price would this production volume turn profitable? (3 points) c. The MRU bought from Nielsen demand and price data for the past three years. Based on these historical data they estimated the following empirical market demand-market price relationship 1 Q" = 100,000 0.003 With Altamira S.E. there would be n = 20 firms in the market offering very similar products under the same cost conditions. Calculate the Altamira S.E.'s expected product-specific profits and its Return-on-Sales (ROS) post entry. (5 points) d. Based on c), what are the production incentives for Altamira S.E. after entry and realization of the expected profit? Should Altamira S.E. decide to produce 2,500 units, assuming that each of the competing firms keeps its output choice constant and demand and costs remain the same? What may be the problem with this thought? (7 points) e. Profits also attract other newcomers. How many firms would be viable at the given demand? What would be the market price ceteris paribus? (8 points)