Microeconomics

1. In 2003, Fossil released product called the "Wrist PDA' to market. This win an early generation stuart watch that ran the Palm OS and contained 8 MB of RAM and 4 MB of flash memory. The watch chad came with. Uryide la help use the tiny monochrome display, which had a resolution of 150- 160 pizzle Fossil registered patents on certain aspects of the technology and design of the product. but they could not prevent other companies from developing similar products to compete in the smartwatch market. a. What type of competition do you expect Fossil to lace in this industry? (using the specific types of competition in microeconomics) b. Assume that the demand for the Wrist PDA is represented by the demand curve: P. 1200-0,45q and the product's marginal costs and total costs are represented by the respective functions; MC-2545q and TC-25q-2.5q'. At what price should Fom sell the Wrist PDA? How many watches should they produce? What would be the firm's total profits in the short run; Illustrate this in a graph, clearly Identifying p*. q, and profits (the curves themselves do not have to be perfectly accurate, but you should identify the appropriate points on the curves). . What should Fossil expect to happen in this market in the long-run? Illustrate with a graph and explain. e. What do you expect to happen in the industry and beal pest-long run? What are the benefits and costs of this type of competition overall to society 2. Off-season demand for bus travel between LA and San Diego is given by the inverse demand curve ?- 500-5+Q During New Year, however, danand increases to: P. 1300-4.Q. Marginal costs are constant at $6, but there is a maximum capacity of 100 tickets that can be sell at any pie. Fixed costs are equal to $45. Assuming one firm has a monopoly on bus travel between the twe cities, what price should tickets be sold for during the off-season? How many tickets will be sold? b. What pricing strategy should be implemented during New Year? What price should be set and how many tickets will be sold during this time? C. What is the change in total profit between Off-season travel and wayel during New Year? J. Consider Company X that sells 3 products to 3 customers. The maxinwun willingness to pay for cach product by each customer is shown below