1. A firm has the possibility of charging different prices in its domestic and foreignmarkets. The corresponding demand equations are given byQ1 = 300 – P,Q2 = 400 – 2P,%3Dand the total cost function isTC = 5000 + 100Qwhere Q = Q1 + Q2. Determine the firm's pricing policy that maximizes the firm'sprofit and hence calculate the value of the maximum profit.2. A firm is a monopolistic producer of two goods G, and G2. The prices are related toquantities Q1 and Q2 according to the demand equationsQ1 = 50 – P,2Q2 = 90 – P2If the total cost function isTC = Q? + 2Q,Q2 + Q?a) Find an expression for the firm's profitb) Find the values of Q1 and Q2 which maximises profit by applying first andsecond order conditions and then the corresponding prices.c) Find the maximum profit and deduce the prices that maximises profit

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1. A firm has the possibility of charging different prices in its domestic and foreign markets. The corresponding demand equations are given by Q1 = 300 – P. Q2 = 400 – 2P, and the total cost function is TC = 5000 + 100Q where Q = Q1 + Q2. Determine the firm's pricing policy that maximizes the firm's profit and hence calculate the value of the maximum profit.

1. A firm has the possibility of charging different prices in its domestic and foreign markets. The corresponding demand equations are given by Q1 = 300 – P. Q2 = 400 – 2P, and the total cost function is TC = 5000 + 100Q where Q = Q1 + Q2. Determine the firm's pricing policy that maximizes the firm's profit and hence calculate the value of the maximum profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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