1. Firm size of it and grocery store shareation. Large stanchs often serve the market segment with crowing and stable customers and leave small and unstable customers to littler steadfasts. deem the total market size of a yield is 400 one thousand thousand, of which 300 cardinal is stable with hesitancy take aim at 45% per annum and the other 100 million is more than mercurial with uncertainty aim of 65% per annum. Suppose in that respect are two firms in the market. One is the dominant firm with the level of fixed asset at 40 million and the other is the fringe firm with the level of fixed asset at 5 million. Assume the unit value of the product is 1 million, discount rate to be 8% and the facilities concluding 20 years. If the dominant firm only serves the 300 million stable market segment and leave the 100 million volatile market segment to the fringe firm, calculate the cabbage of the dominant firm and the fringe firm? If the dominant firm decides to serve the whole market, because of the need to cater the more volatile market segment, its internal operation has to adapt according to the circle of the high volatility. Hence the level of uncertainty of the whole firm will be adjusted to a higher level that is close to 65%, the level of uncertainty of the volatile market segment.
With this level of uncertainty, calculate the profit of the dominant firm. Explain wherefore dominant firms and fringe firms often coexist in the same market.
The profit of a firm is
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2. Pricing strategies of different firms. Suppose there are two gas displaces, one from a small independent firm and the other from a large branded firm, in two cities. Each gas station sells 30 unit of gasoline daily and gasoline bell of 1. Large firm has a fixed cost of 5 and small firm has a fixed cost of 2. We except assume the discount rate is 12% per year and the era of the fixed assets of both firms are 15 years. If the usual uncertainty rate is...If you want to get a full essay, set out it on our website: Ordercustompaper.com
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