Question

 If BMW were forced to charge the same price in each​ market, what would be the quantity sold in each​ market, the equilibrium​ price, and the​ company's profit? ​(round dollar amounts to the nearest penny and quantities to the nearest​ integer) To solve this​ problem, first, find the combined market demand by horizontally summing the European and US demand​ curves: Q=Qe+Qu=4,500,000-100Pe+1,300,000-20Pu=5,800,000-120P ​Thus, inverse demand​ is: P=5,800,000/120-1/120q   ​(To avoid rounding​ problems, do not convert the fractions to​ decimals) The equilibrium price would be ​blank ​, and BMW would sell blank cars in Europe and blank cars in the United States. BMW makes a profit of ​$

constant marginal cost equal to

​$20,000

and a fixed cost of

​$10  

billion.

Answer 1