BASED ON THE GRAPH ABOVE CALCULATE: a.THE PROFIT MAXIMIZING PRICE FOR THIS FIRM

b. the firm's profit when it produces at the profit maximizing level of output

c. if the firm were operating in a perfectly competitive industry what will be its profit maximizing price and output level

Question 1 - (25 marks) Read the following passage carefully and answer questions The beverages industries in which Pepsi operate are highly competitive. They compete with major international beverage companies in multiple geographic areas. The Coca-Cola Company is their primary competitor and they compete on the basis of price, quality, product variety, distribution, marketing and promotional activity. If they are unable to compete effectively, they may lose their market share and this will have an adverse impact on their revenues and profit margins. 1. Describe three features/characteristics of the industry in which Pepsi operate. (3 marks) 2. Although Coca-Cola and Pepsi sell very similar products they spend millions of dollars each year to market their products to customers. Explain one advantage and one disadvantages of advertising on society. (6 marks) 3. Compare the beverages industry competitive environment to perfect competition in terms of economic efficiency. (3 marks) 4. R&D Company manufactures plastic bottles for the beverage industry. These bottles are then used as raw materials in the production of different sodas on the market. Use the diagram below to answer the following $/q 30 MC ATC 28 27 AVC 26 25 N D 20 MR 100 190 260 300 400 a) What is the profit-maximizing level of output for this firm