Homework Help is Here – Start Your Trial Now!
Business
Economics
1. Consolidated Salt Company sells table salt to both retail grocery chains and commercial users (e.g., bakeries, snack food makers, etc.). The demand function for each of these markets is: Retail grocery chains P1 = 180 – 8Q1 Commercial users P2 = 100 – 4Q2 where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Consolidated's total cost function (which includes a "normal" return to the owners) for salt is: TC = 50 + 20(Q1+ Q2) (a) Determine Consolidated' s total profit function. (b) Assuming that Consolidated is effectively able to Icharge different prices in the two markets, what are Ithe profit-maximizing price and output levels for the product in the two markets? What is Consolidated' s total profit under this condition? (c) Assuming that Consolidated is required to charge the same price in each market, what are the profit maximizing price and output levels? What is Consolidated' s total profit under this condition?

1. Consolidated Salt Company sells table salt to both retail grocery chains and commercial users (e.g., bakeries, snack food makers, etc.). The demand function for each of these markets is: Retail grocery chains P1 = 180 – 8Q1 Commercial users P2 = 100 – 4Q2 where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Consolidated's total cost function (which includes a "normal" return to the owners) for salt is: TC = 50 + 20(Q1+ Q2) (a) Determine Consolidated' s total profit function. (b) Assuming that Consolidated is effectively able to Icharge different prices in the two markets, what are Ithe profit-maximizing price and output levels for the product in the two markets? What is Consolidated' s total profit under this condition? (c) Assuming that Consolidated is required to charge the same price in each market, what are the profit maximizing price and output levels? What is Consolidated' s total profit under this condition?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question

help

1. Consolidated Salt Company sells table salt to both retail grocery chains and commercial users (e.g., bakeries, snack food makers, etc.). The demand function for each of these markets is: Retail grocery chains : P1 = 180 – 8Q1 Commercial users P2 = 100 – 4Q2 where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Consolidated's total cost function (which includes a "normal" return to the owners) for salt is: TC = 50 + 20(Q1 + Q2) (a) Determine Consolidated' s total profit function. (b) Assuming that Consolidated is effectively able to Icharge different prices in the two markets, what are Ithe profit-maximizing price and output levels for the product in the two markets? What is Consolidated' s total profit under this condition? (c) Assuming that Consolidated is required to charge the same price in each market, what are the profit maximizing price and output levels? What is Consolidated' s total profit under this condition?
Transcribed Image Text:1. Consolidated Salt Company sells table salt to both retail grocery chains and commercial users (e.g., bakeries, snack food makers, etc.). The demand function for each of these markets is: Retail grocery chains : P1 = 180 – 8Q1 Commercial users P2 = 100 – 4Q2 where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Consolidated's total cost function (which includes a "normal" return to the owners) for salt is: TC = 50 + 20(Q1 + Q2) (a) Determine Consolidated' s total profit function. (b) Assuming that Consolidated is effectively able to Icharge different prices in the two markets, what are Ithe profit-maximizing price and output levels for the product in the two markets? What is Consolidated' s total profit under this condition? (c) Assuming that Consolidated is required to charge the same price in each market, what are the profit maximizing price and output levels? What is Consolidated' s total profit under this condition?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Comparative Advantage
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS