C 4 Soft Lens Inc Has Enjoyed Rapid Growth In Sales And High Operating Profits On Its Innovative Extended Wear Soft C 1 (64.06 KiB) Viewed 36 times
C 4 Soft Lens Inc Has Enjoyed Rapid Growth In Sales And High Operating Profits On Its Innovative Extended Wear Soft C 2 (64.06 KiB) Viewed 36 times
C.4 Soft Lens, Inc., has enjoyed rapid growth in sales and high operating profits on its innovative extended-wear soft contact lenses. However, the company faces potentially fierce competition from a host of new competitor as some important basic patents expire during the coming year. Unless the company is able to thwart such competition, severe downward pressure on prices and profit margins is anticipated. (10 points) Price(s) 20 19 18 17 16 15 14 13 12 11 10 Monthly Output (million) 0 1 2 3 4 5 6 7 8 9 Total Cost (S million) 0 12 27 42 58 75 84 92 96 99 105 10 4.1 If cost conditions remain constant, what is the monopolistically competitive high- price/low-output long-run equilibrium in this industry? What are industry profits? 4.2 Under the same cost conditions, what is the monopolistically competitive low- price/high-output equilibrium in this industry? What are industry profits?
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