Question: Need help with A. and work. Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $20,000 and a

Need help with A. and work.

Need help with A. and work. Suppose that BMW can produce any

Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $20,000 and a xed cost of $10 billion. You are asked to advise the CEO as to what prices and quantities BMW should set for sales in Europe and in the United Suites. The demand for BMWs in each market is given by GE =4,5oo,ooo 100PE and QU = 1,100,000 - 20PU where the subscript E denotes Europe, the subscript U denotes the United States. Assume that BMW can restrict US, sales to authorized BMW dealers only a. What quantity of BMWs should the rm sell in each market, and what should the price be in each market? What should the total prot be? (round dollar amounts to the nearest penny and quantities to the nearest integer) In Europe, the equilibrium quantity is 1250000 cars at an equilibrium price of $ 32500 . While in the United States, the equilibrium quantity is 300000 cars at an equilibrium price of $ 35000 . BMW makes a total prot of $ 10125000000

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