Question: please answer fully and draw graphs if needed to support the answer Question 3: You are the manager of ABCSOLAR, a firm that competes with

please answer fully and draw graphs if needed to support the answer please answer fully and draw graphs if needed to

Question 3: You are the manager of ABCSOLAR, a firm that competes with XYZSOLAR to sell state-of-theart solar panels to residential consumers. From the perspective of consumers, the two firms' solar panel are indistinguishable. The large investment required to set up production facilities a fixed cost of $500,000 - is a barrier to other firms entering the solar panel market. ABC and XYZ each operate under the assumption that the other firm will hold its output constant. Analysts have determined that the inverse market demand for solar panels is P=7500Q. Each firm produces at a marginal cost of $900 per solar panel. Now suppose that the Director of R&D at ABC has informed you that, with an additional investment of $200,000 to improve production efficiency, your marginal costs can be reduced from $900 to $600 per solar panel. Should this investment be made? Explain fully

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