Question
In: Economics
Bikes LLC is a company that manufactures and sells motorcycles in North America. It has the...
Bikes LLC is a company that manufactures and sells motorcycles in North America. It has the following demand function for its motorcycles: P = 30,000 – 100Q Bikes LLC has a marginal cost (MC) that is constant and equal to $4,000. What will Bikes LLC’s price be if it decides to sell the motorcycles by itself? What will the price be if it sells them though MC Dealership, LLC an independent distributor? Consider that when Bikes LLC contracts with MC Dealership, LLC, it takes into account that MC Dealership, LLC faces the same demand curve. Assume that (MC) is constant and equal to $4,000. What is the impact of distributing the motorcycles through MC Dealership, LLC on the price of the motorcycles? Be sure to explain and interpret your calculations.
Solutions
Expert Solution
IN A MARKET OF MONOPLOY , A MONOPOLIST CHARGES A HIGHER PRICE AS HE/SHE IS THE SINGLE SELLER IN THE MARKET , THEREBY , , SELLING A LOWER QUANTITY THAN HE/SHE COULD HAVE HAD HE CHARGED A PRICE CHARGED IN A PERFECTLY COMPETITIVE MARKET....ON THE OTHER HAND , SELLING A GODD IN A PERFECTLY COMPETITIVE MARKET , AN INDIVIDUAL FIRM IS PRICE TAKER WHEREAS THE INDUSTRY , OF WHICH THE FIRM IS PART OF , IS THE PRICE MAKER....EACH FIRM IN THE INDUSTRY FACES THE SAME PRICE AND PRICE REMAINS CONSTANT IN THE MARKET...IT IS DUE TO THIS REASON LARGER AMOUNT OF QUANTITY IS SOLD IN PERFECTLY COMPETITIVE MARKET THAN THE MONOPLOY.....
Rahul Sunny answered 2 years agoRelated Solutions
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Motorcycles USA is a company that manufactures and sells
motorcycles in North America. It has the following demand function
for its motorcycles:
P = 30,000 – 100Q
Motorcycles USA has a marginal cost (MC) that is constant and
equal to $4,000.
What will Motorcycles USA’s price be if it decides to sell the
motorcycles by itself? What will the price be if it sells them
though MC Dealership, LLC an independent distributor? (10
points)
Consider that when Motorcycles USA contracts...
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variety of engines and configurations. The company has recently
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Case:- DETROIT BIKES: BECOMING THE BIGGEST BICYCLE MANUFACTURER IN NORTH AMERICA. by Ivey publishing 1. Apply...
Case:- DETROIT BIKES: BECOMING THE BIGGEST BICYCLE MANUFACTURER
IN NORTH AMERICA. by Ivey publishing
1. Apply the PEST and PORTER e-scan model to
the Detroit Bikes
business model. Based on this, what is your take on the
attractiveness of their industry as a business
opportunity?
2. What is the competitive advantage of
Detroit Bikes? Brand? Low-cost?
Innovation? Niche? Diversification? Please explain. How would you
characterize their target market and brand?
3. Noting all we have discussed in the course this...
case:-DETROIT BIKES: BECOMING THE BIGGEST BICYCLE MANUFACTURER IN NORTH AMERICA by Ivey publishing PEST and PORTER...
case:-DETROIT BIKES: BECOMING THE BIGGEST BICYCLE MANUFACTURER
IN NORTH AMERICA by Ivey publishing
PEST and PORTER analysis
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Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph...
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