A firm is considering bidding for the franchise to sell cola and hot dogs at a baseball stadium. It estimates the demand functions for cola and hot dogs respectively as De=20-4pc-PH DH=15-pc-5PH where De is demand for cola in thousands (of cans), DH is demand for hot dogs in thousands, pc is the price of a can of cola in dollars, and PH is the price of a hot dog. The unit cost of supplying a hot dog is constant at $0.1, and the unit cost of a can of cola is likewise constant at $0.5. (a) Find the upper limit to the amount the firm would bid for the franchise.

A firm is considering bidding for the franchise to sell cola and hot dogs at a baseball stadium. It estimates the demand functions for cola and hot dogs respectively as De=20-4pc-PH DH=15-pc-5PH where De is demand for cola in thousands (of cans), DH is demand for hot dogs in thousands, pc is the price of a can of cola in dollars, and PH is the price of a hot dog. The unit cost of supplying a hot dog is constant at $0.1, and the unit cost of a can of cola is likewise constant at $0.5. (a) Find the upper limit to the amount the firm would bid for the franchise.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. A firm is considering bidding for the franchise to sell cola and hot dogs at
a baseball stadium. It estimates the demand functions for cola and hot dogs
respectively as
De=20-4pc-PH
DH = 15-Pc-5PH
where De is demand for cola in thousands (of cans), DH is demand for hot
dogs in thousands, pc is the price of a can of cola in dollars, and PH is the
price of a hot dog. The unit cost of supplying a hot dog is constant at $0.1,
and the unit cost of a can of cola is likewise constant at $0.5.
(a) Find the upper limit to the amount the firm would bid for the franchise.

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