Sloan transmissions, inc., has the following estimates for its new gear assembly project: price = $2,400 per unit; variable costs = $480 per unit; fixed costs = $2.9 million; quantity = 78,000 units. suppose the company believes all of its estimates are accurate only to within ±10 percent. what values should the company use for the four variables given here when it performs its best-case scenario analysis? what about the worst-case scenario?

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?