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2. Suppose a market can be separated into two distinct markets, where P₁ = 26- 2Q1 and P2 = 20 - Q2 are the demands in each market. Total costs are given by TC = 10 + 10(Q1 + Q2). a. Find the profit maximizing level of output and the price per unit in each segment of the market. b. Graph the demand curves, marginal revenue curves, and marginal cost, for each market segment. c. Find the price elasticity of demand at the profit maximizing prices.

2. Suppose a market can be separated into two distinct markets, where P₁ = 26- 2Q1 and P2 = 20 - Q2 are the demands in each market. Total costs are given by TC = 10 + 10(Q1 + Q2). a. Find the profit maximizing level of output and the price per unit in each segment of the market. b. Graph the demand curves, marginal revenue curves, and marginal cost, for each market segment. c. Find the price elasticity of demand at the profit maximizing prices.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Suppose a market can be separated into two distinct markets, where P₁ = 26- 2Q1 and P2 = 20 - Q2 are the demands in each market. Total costs are given by TC = 10 + 10(Q1 + Q2). a. Find the profit maximizing level of output and the price per unit in each segment of the market. b. Graph the demand curves, marginal revenue curves, and marginal cost, for each market segment. c. Find the price elasticity of demand at the profit maximizing prices.
Transcribed Image Text:2. Suppose a market can be separated into two distinct markets, where P₁ = 26- 2Q1 and P2 = 20 - Q2 are the demands in each market. Total costs are given by TC = 10 + 10(Q1 + Q2). a. Find the profit maximizing level of output and the price per unit in each segment of the market. b. Graph the demand curves, marginal revenue curves, and marginal cost, for each market segment. c. Find the price elasticity of demand at the profit maximizing prices.
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