Hello, I just need advice on my homework. Out of the two pictures attached which answers look right? You do not have to give me the answer I just want to see if I am heading on the right direction. Thanks!
LE ma copy Paste Merge & Center Format Painter Fort Alignment Cipboard 78 5) Capacity and Prices You are a manufacturer of large disk drives with only one competitor in your market, DD. (Large disk chives are all very sindar, so there is relatively little differentiation. ) You and your competitor both produce your own drives. How many chives you can produce will be limited by the production capacity you have installed. While you can produce less than your capacity, you can never produce more than your capacity. You will have to choose your capacity long before you make actual price and production decisions. The market is sufficiently transparent that you know DD's capacity and they know yours. To simplify the discussion, let production capa pacity be completely free. So the only effect of choosing capacity is that you limit how much you can produce in the future. Actual production is very flexible, so you can adjust your production levels to the demand that materializes (up to your production capacity). The cost of production is $10 per drive for both you and DD. There is no fixed cost Your competitor DD has already (irreversibly) chosen its production capacity, it will be able to produce at most 100,000 drives which allows it to serve the whole market, if needed. You now have to choose your production capacity. In terms of price setting. the scenario is that you first set your price and then DD responds. (Based on both your prices, actual orders get generated. Both you and DD then produce these orders up to your production capacity. Any demand that you can't fulfill will buy from DD and the other way around ) Please find your best capacity level and price. (You can try out different capacity levels and prices to find the best one. To speed the process, consider only multiples of 5 for capacity. Hint: Try both 40 and 100 as capacity and observe how it affects DD's price setting behavior.) DD capacity Your capacity Your price 100 78 47 DD price Your profit 100 DD profit 2886 1980 Your quantity 78 DD quantity HE35-713-404 Ready Front Page 2 1 Positioning 22 Please proceed to the next worksheet 21 Capacity Choice 30 Price Competition 40 NumbeAutosave Review View Help File intent Draw Page Layout Formulas Data Home & Cut Times New Roma - 12 - A" A SEE 23 Wrap Text On copy Merge & Center Parte Format Painter Alignment Clipboard Fort 16 EG 5) Capacity and Prices You are a manufacturer of large disk chives with only one competitor in your market, DD. (Large disk chives are all very shuilar, so there is relatively Battle differentiation ) You and your competitor both produce your own drives. How many drives you can produce will be Emited by the production capacity you have installed. While you can produce less than your capacity, you can never produce more than your capacity. You will have to choose your cap capacity long before you make actual price and production decisions. The market is sufficiently transparent that you know DD's capacity and they know yours. To sinpl nplify the discussion, let production capacity be completely free. So the only effect of choosing capacity is that you limit how much you can produce in the future. Actual production is very flexible, so you can adjust your production levels to the demand that materializes (up to your production capacity). The cost of product huaction is $10 per drive for both you and DD. There is no fixed cost Your competitor DD has already (irreversibly) chosen its production capacity, it will be able to produce at most 100,000 drives which allows it to serve the whole market, if needed. You now have to choose your production capacity. In terms of price setting, the scenario is that you first set your price and then DD responds, (Based on both your prices, actual orders get generated. Both you and DD then produce these orders up to your production capacity. Any demand that you can't fulfill will buy from DD and the other way around.) Please find your best capacity level and price. ( You can try out different capacity levels and prices to find the best one. To speed the process, consider only multiples of 5 for capacity. Hint Try both 40 and 100 as capacity and observe how it affects DD's price setting behavior.) DD capacity Your capacity Your price DD price 100 Your profit DD profit 100 16 25.5 414 480.5 HRS 9.713-804 Front Page 1) Positioning Your quantity DD quantity 31 2) Capacity Choice Please proceed to the next worksheet 69 3) Price
