ECO - INTERGRATING CASE 1A Question 5 & 6

INTERGRATING CASE 1A

Are There Two Markets for HCM Ovens?

5. What other variables (not in the estimated demand function for the cheaper model given above) might affect the demand for this product? How might the firm obtain information on their effects on demand after the new model is introduced?

6. Suppose that the cost per unit incurred by CTI to produce additional units of the cheaper model is S125 over its feasible range of output. Can you determine from the table you constructed in Question1 the optimal quantity of this own for CTI to produce? Why? (We shall discuss this issue carefully in Chapters 5, 6, and 7.)