Will he stay in the industry or exit in the long run? 1 answer below »


Consider Bob’s DVD assembly vivid in the earlier scrutiny. Assume that DVD genesis is a completely competitive diligence. For each of the following scrutinys, teach your answers.

a. What is Bob’s break-even expense? What is his fasten-down expense?

b. Suppose the expense of a DVD is $2. What should Bob do in the defective run?

c. Suppose the expense of a DVD is $7. What is the gain-maximizing amount of DVDs that Bob should result? What conquer his completion gain be? Conquer he result or fasten down in the defective run? Conquer he arrive in the diligence or debouchure in the desire run?

d. Suppose instead that the expense of DVDs is $20. Now what is the gain-maximizing amount of DVDs that Bob should result? What conquer his completion gain be now? Conquer he result or fasten down in the defective run? Conquer he arrive in the diligence or debouchure in the desire run?