Systems produces a variety of weapons systems for the United States military. In the past, it has created and manufactured the Bradley armored infantry vehicle. Suppose that it is considering the production of a new next$-$generation armored vehicle. The R&D for this project has already taken place, and BAE has been reimbursed under a contract that is now complete. Now, it must bid on the manufacturing contract for the vehicle. To manufacture the first vehicle, BAE estimates that it will incur costs totaling $$4$ million. BAE projects that the cost per vehicle will decline over time, with each vehicle costing $1\mathrm{.}5\%$ less than the previous vehicle manufactured. BAE anticipates building $60$ of these vehicles over the next few years. BAE must decide how much to bid on this program. The Department of Defense would like BAE to provide a price per vehicle for the entire $60$ units. BAE would like to select a price that will, by the end of the program, yield an overall margin of $20\%.$ 

 

a$.$ What price per vehicle should BAE bid in order to achieve a $20\%$ margin on this program overall?

b$.$ Suppose that BAE Systems went on to compete for contracts from other countries for the production of this same vehicle. For those contracts, several international cotinine's are considering entering the armored vehicle market. Would BAE Systems have a first mover advantage in the production of this vehicle? Why or why not?