1. Peloton Company

The sales of home exercise equipment increased exponentially during the Covid Crisis. Membership at popular Fitness businesses such as 24-hour Fitness and Planet Fitness and local Fitness clubs have suffered resulting in revenue losses and bankruptcies of small enterprises.

Peloton is widely considered to be the industry leader in the connected fitness space, and offers some of the most immersive workout experiences available. It manufactures exercise bicycles and sells them under conditions of monopolistic competition. The owner of the company has estimated its demand function as P = 2575 - 5Q, where P is in dollars and Q is in number of Treadmills sold per week. The company believes its weekly expenses vary with output according to the equation:

TC = 25,000 + 25Q - 5Q² + 1/3 Q³.

Based on these equations and using concepts from Chapters 4, 7 and 9: