A company can sell its product in two separate market defined by the following inverse demand functions, P1=10-Q1 , P2=20-1.5Q2 the cost associated with production is given by ?? = 4 + 2Q a) What prices and quantities should the firm charge and produce in each market. b) What profit will the firm make if it practice price discrimination c) If the firm is charging uniform price in all market what price will it charge and what output will maximize profit d) What is the maximum profit for charging same price? e) Calculate the elasticity of demand in each market and comment on your result

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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1. A company can sell its product in two separate market defined by the following inverse

demand functions, P1=10-Q1 , P2=20-1.5Q2 the cost associated with production is given by

?? = 4 + 2Q

a) What prices and quantities should the firm charge and produce in each market.

b) What profit will the firm make if it practice price discrimination

c) If the firm is charging uniform price in all market what price will it charge and what

output will maximize profit

d) What is the maximum profit for charging same price?

e) Calculate the elasticity of demand in each market and comment on your result

 

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