After talking your managerial economics class, you realize that you can probably raise your profits by price discriminating by charging different prices in the two locations. You then breakdown sales across the two locationsIn Laredo: You sold 200 burger meals per week at $9 and 100 meals at $10In San Antonio: You sold 1200 meals per week at $9 and 1100 meals at $10Using the two prices above, estimate your demand function in Laredo. What would demand be at the optimal price from Q1?Using the two prices above, estimate your demand function in San Antonio. What would demand be at the optimal price from Q1?Calculate the point price elasticity of demand at the optimal price for Q1 (and quantity from part A) in LaredoCalculate the point price elasticity of demand at the optimal price for Q1 (and quantity from part B) in San AntonioAssuming that your marginal costs are $3, are you charging more, less, or exactly the optimal price in LaredoHint: Calculate the markup on price and compare it to from the earlier questionOptimal price - $8, optimal quantity – 1,6006. Assuming that your marginal costs are $3, are you charging more, less, or exactly the optimal price in San Antonio

In the mentioned question we have been asked about the different demand functions to be calculated…

Answered: After talking your managerial economics…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 8WNG

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After talking your managerial economics class, you realize that you can probably raise your profits by price discriminating by charging different prices in the two locations. You then breakdown sales across the two locations

In Laredo: You sold 200 burger meals per week at $9 and 100 meals at $10

In San Antonio: You sold 1200 meals per week at $9 and 1100 meals at $10

Using the two prices above, estimate your demand function in Laredo. What would demand be at the optimal price from Q1?
Using the two prices above, estimate your demand function in San Antonio. What would demand be at the optimal price from Q1?
Calculate the point price elasticity of demand at the optimal price for Q1 (and quantity from part A) in Laredo
Calculate the point price elasticity of demand at the optimal price for Q1 (and quantity from part B) in San Antonio
Assuming that your marginal costs are $3, are you charging more, less, or exactly the optimal price in Laredo

Hint: Calculate the markup on price and compare it to from the earlier question

Optimal price - $8, optimal quantity – 1,600

6. Assuming that your marginal costs are $3, are you charging more, less, or exactly the optimal price in San Antonio

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