3. Swedish Automobiles Are the Best (SAAB) sells two types of vehicles: a truck and a car. The monthly inverse demand or price equation for trucks is estimated as P₁= 65 -0.05Q, (where Qt is the number of trucks sold and Pt is the price per truck in thousands). For cars is: Pe=55-0.1Qc. It costs SAAB $27 (thousand) to produce each additional truck and $21 (thousand) to produce each additional car, so MC, = 27 and MC. = 21. Assume no fixed cost so TC= = MC X Q. . . . . State the total profit equation AND marginal profit for trucks: Determine the profit-maximizing output for trucks (Q) and compute the total profit that SAAB will earn from selling this quantity of trucks: State the total profit equation AND marginal profit for cars: Determine the profit-maximizing output for cars (Q.) and compute the total profit that SAAB will earn from selling this quantity of cars:

3. Swedish Automobiles Are the Best (SAAB) sells two types of vehicles: a truck and a car. The monthly inverse demand or price equation for trucks is estimated as P₁= 65 -0.05Q, (where Qt is the number of trucks sold and Pt is the price per truck in thousands). For cars is: Pe=55-0.1Qc. It costs SAAB $27 (thousand) to produce each additional truck and $21 (thousand) to produce each additional car, so MC, = 27 and MC. = 21. Assume no fixed cost so TC= = MC X Q. . . . . State the total profit equation AND marginal profit for trucks: Determine the profit-maximizing output for trucks (Q) and compute the total profit that SAAB will earn from selling this quantity of trucks: State the total profit equation AND marginal profit for cars: Determine the profit-maximizing output for cars (Q.) and compute the total profit that SAAB will earn from selling this quantity of cars:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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