Sroufe manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. two vendors have presented proposals. the fixed costs are $ 55 comma 000 for proposal a and $ 75 comma 000 for proposal b. the variable cost is $ 14.00 for a and $ 11.00 for b. the revenue generated by each unit is $ 22.00. a) the break-even point in units for the proposal by vendor a = nothing units (round your response to the nearest whole number). b) the break-even point in units for the proposal by vendor b = nothing units (round your response to the nearest whole number).

Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers.firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?