Assume that the quarterly demand and supply functions for German made Bosch washer machines: Qd = 340 – 6P Qs = 100 + 2P
a. Where price is $125 dollars, what are the quantities demanded and supplied?
b. Assume that Bosch Inc. wants to prevent its competitors from under cutting their prices. So the Executives from Bosch decide to eliminate all competition by self imposing a price floor of $37. Would this result in an excess supply of or demand? Draw graphs
c. Assume that Bosch wants to focus solely on price and decides to raise prices significantly to $325. Would this result in an excess supply of or demand? Draw Graphs