Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $10.20) $163,200 Direct materials and direct labor$99,200 Overhead (20% variable) 19,200 Selling and administrative expenses (all fixed) 32,400 (150,800) Operating income $12,400 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,400 units at $7.94 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $640 and selling and administrative costs by $340. Assuming Benjamin has excess capacity and accepts the offer, its profits will:

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?