Saturday

October 25, 2014

October 25, 2014

Posted by **ismail** on Tuesday, August 25, 2009 at 10:41am.

Pi= 200-2Qi Pii=180-4Qii

cost function is C=20(Qi+Qii)

A) what Quantities and price that maximize the firm's profit

B) how much profit is lost if price discrimination becomes illigal?

C)discuss the consequences on the optimal quantities, prices and profits of the introduction of a tax of 5 per unit sold in market 1

==i just seem to be getting very very weird answers === please i need help!!!

- mathematical economics -
**economyst**, Wednesday, August 26, 2009 at 1:41pmAlways Always Always, set MC=MR

MC with respect to Qi and/or Qii is 20.

In market i:

TR is Pi*Qi = 200Qi - 2Qi^2. MR is the first derivitive. So MR = 200-4Qi

MR=MC = 200-4Qi = 20. Solve for Qi.

Repeat for market ii. With Qi and Qii known, solve for total profit

Now for the tricky part. Derive the demand functions in a combined market (where price discrimination is illegal). P = 200-2Q for Q<= 10 and P=180 - 6*(Q-10) for Q> 10. If we extend this latter line back to the origion, the demand equation becomes 240-6Q for Q>10. So, MR is 240-12Q. Again, solve for optimal Q, and then total profit.

For Part C, I need some clarification. Is the 5 per-unit tax apply in scenario A with price discrimination or scenario B without price discrimination. If B, can the tax be tacked on to the price, so that in market 1, consumers pay 5 more than in market 2. Or does the price after taxes still need to be the same in both markets.

I hope this helps.

**Answer this Question**

**Related Questions**

CALCULUS ECONOMICS - Consider an economy in which a monopolistic firm serves two...

Inter - 19) The process of naming broad product-markets and then segmenting them...

economics - A monopolist faces market demand given by P = 200 – Q. For this ...

marketing - 21) ______________ is the process of naming broad product-markets ...

Marketing - ______________ is the process of naming broad product-markets and ...

marketing - is the process of naming broad product-markets and then segmenting ...

Economics - Hi, I need help with these four questions can anyone help me, it is ...

Ecomomics - Hi, I need help with these four questions can anyone help me, it is ...

Economics/Math - Suppose there are four firms in a competitive market and that ...

Economics - TFC = $1,000 MC = $1 (and constant) 2.Assume that all households ...