The market for 3D pancake printers is heating up! (yes these are actually being

Question

The market for 3D pancake printers is heating up! (yes these are actually being developed) Current demand for 3D pancake printers is represented by the following function: 3. 1016-Q. Designing and programming the printers can be done for a fixed cost of $42,000. The constant average cost of producing 3D pancake printers is then $200 per printer. a. Fran's Flapjack Formulators currently has a monopoly on 3D pancake printers and sells them for $608 each. You are considering entering into this market to compete with Fran, which would result in an oligopoly. Fran has already taken orders for the next six

Explanation / Answer

When price=608 then Q=1016-608=408

Profit=(608-200)*408-42000=166464-42000=124464

Since firm is incurring huge economic profit and thus entering in the market is feasible and monopoly should be converted into oligopoly.

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