The abc company is planning a new product line and will build a new plant to manufacture the parts for a new product line. the product line will include 50 different models. annual production of each model is expected to be 1000 units. each product will be assembled of 400 components. all processing of parts will be accomplished in one factory. there are an average of 6 processing steps required to produce each component, and each processing step takes 1.0 minute (includes an allowance for setup time and part handling). all processing operations are performed at workstations, each of which includes a production machine and a human worker. if each workstation requires a floor space of 250 ft2, and the factory operates one shift (2000 hr/yr), determine (a) how many production operations, (b) how much floor space, and (c) how many workers will be required in the plant.

1. consider a two-firm industry. firm 1 (the incumbent) chooses a level of output qı. firm 2 (the potential entrant) observes qı and then chooses its level of output q2. the demand for the product is p 100 q, where q is the total output sold by the two firms which equals qi +q2. assume that the marginal cost of each firm is zero. a) find the subgame perfect equilibrium levels of qi and q2 keeping in mind that firm 1 chooses qi first and firm 2 observes qi and chooses its q2. find the profits of the two firms-n1 and t2- in the subgame perfect equilibrium. how do these numbers differ from the cournot equilibrium? b) for what level of qi would firm 2 be deterred from entering? would a rational firm 1 have an incentive to choose this level of qi? which entry condition does this market have: blockaded, deterred, or accommodated? now suppose that firm 2 has to incur a fixed cost of entry, f> 0. c) for what values of f will entry be blockaded? d) find out the entry deterring level of q, denoted by q1', a expression for firm l's profit, when entry is deterred, as a function of f. for what values of f would firm 1 use an entry deterring strategy?