Candak Corporation produces professional quality digital cameras. The market for professional digital cameras is monopolistically competitive. Assume

Question:

Candak Corporation produces professional quality digital cameras. The market for professional digital cameras is monopolistically competitive. Assume that the inverse demand curve faced by Candak (given its competitors’ prices) can be expressed as P = 5,000 - .2Q and Candak’s total costs can be expressed as TC = 20,000,000 + .05Q 2 . Answer the following questions.

a. What price and quantity will Candak choose?

b. Is this likely to be a long-run equilibrium for Candak Corporation? Whyor why not? If not, what is likely to happen in the market for professional digital cameras, and how will it affect Candak?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...