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Help me for this question. It costs kr. 1200 to produce a low-quality printer and kr. 1600 to produce a high-quality printer.

Help me for this question.

It costs kr. 1200 to produce a low-quality printer and kr. 1600 to produce a high-quality printer. Consumers cannot distinguish good printers from poor printers when they make their purchase. Four firms produce printers. Consumers value printers at their cost of production and are risk neutral. 


a)    Will any of the four firms be able to produce high quality printers without making losses? 


b)   What happens if consumers are willing to pay kr. 3600 for high-quality printers?

Top Answer

Part A They will not, the firms producing the high quality printers will definitely have more costs and hence their profit... View the full answer

1 comment
  • all the best dear
    • kerryliz
    • May 01, 2018 at 6:54am

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