Question
In Scandinavia, the annual inverse demand for midrange consumer drones is given by: P=1,000 1 100Q where Q is the number of drones demanded, in
In Scandinavia, the annual inverse demand for midrange consumer drones is given by: P=1,000 1 100Q where Q is the number of drones demanded, in drones per year, and P is the price of a drone, in (euro). Drogon, Inc is a monopoly seller of drones in Scandinavia.
Drogon, Inc considers investing in a new production technology and building a fully automated plant that would allow it to produce and sell drones at zero marginal cost. Its fixed cost, however, would jump to 20 million per year so that its total cost would be: TC2 =20,000,000 Consider the case where Drogon decides to invest. For this new technology monopoly case, calculate: Q2M the number of drones produced; P2M the price of a drone; and 2M, Drogon, Inc' profit.
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