Problem 1: Ever Watch manufactures and sells commercial security surveillance systems to monitor commercial operations 24/7....

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Problem 1: Ever Watch manufactures and sells commercial security surveillance systems to monitor commercial operations 24/7. Given tensions in the world markets, the U.S. will allow exports of these systems, but not imports. Ever Watch sells these systems in the global market, but there is a significant difference in the domestic and world demands for the systems. Economists with the firm have estimated both domestic and foreign demand as shown below. Domestic Demand: P - $30,000-$600 Foriegn Demand: P, -$18,000-$200, From a look at these results, it is obvious that these two markets are very different in terms of their willingness and/or ability to purchase commercial security surveillance systems. Ever Watch's total cost function is given by: TC-$1,000,000+$12,0000 a. If Ever Watch decides to offer commercial security surveillance systems to all at a single price, at what price will foreign buyers be priced out of the market? b. What is the market demand function if Ever Watch decides to offer commercial security surveillance systems for sale to all at a single price? c. If Ever Watch decides to offer commercial security surveillance systems for sale to all at a single price, what price will it charge and how many systems will it sell? How many of the systems will be bought by the domestic buyers and how many by foreign buyers? d. If Ever Watch decides to offer commercial security surveillance systems for sale to each group at different prices (ie, engage in third-degree price discrimination), what price will it charge each group and how many commercial security surveillance systems will each group buy? e Compare the profits and other relevant details under the two pricing strategies. Comment on the comparison Problem 1: Ever Watch manufactures and sells commercial security surveillance systems to monitor commercial operations 24/7. Given tensions in the world markets, the U.S. will allow exports of these systems, but not imports. Ever Watch sells these systems in the global market, but there is a significant difference in the domestic and world demands for the systems. Economists with the firm have estimated both domestic and foreign demand as shown below. Domestic Demand: P - $30,000-$600 Foriegn Demand: P, -$18,000-$200, From a look at these results, it is obvious that these two markets are very different in terms of their willingness and/or ability to purchase commercial security surveillance systems. Ever Watch's total cost function is given by: TC-$1,000,000+$12,0000 a. If Ever Watch decides to offer commercial security surveillance systems to all at a single price, at what price will foreign buyers be priced out of the market? b. What is the market demand function if Ever Watch decides to offer commercial security surveillance systems for sale to all at a single price? c. If Ever Watch decides to offer commercial security surveillance systems for sale to all at a single price, what price will it charge and how many systems will it sell? How many of the systems will be bought by the domestic buyers and how many by foreign buyers? d. If Ever Watch decides to offer commercial security surveillance systems for sale to each group at different prices (ie, engage in third-degree price discrimination), what price will it charge each group and how many commercial security surveillance systems will each group buy? e Compare the profits and other relevant details under the two pricing strategies. Comment on the comparison

Answer rating: 100% (QA)

The detailed answer for the above question is provided below a To determine the price at which foreign buyers will be priced out of the market we need to find the point at which the foreign demand cur... View the full answer