Aidan and Celina are the only sellers of Jack Russell terrier (JRT) in Antigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, based on the number of JRTs that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, after taking this information into account. The inverse demand function for JRTs is P(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell. If Celina expects Aidan to sell q2 JRTs ,what will her own marginal revenue be if she herself sells q1 JRTs?
Aidan and Celina are the only sellers of Jack Russell terrier (JRT) in Antigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, based on the number of JRTs that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, after taking this information into account. The inverse demand function for JRTs is P(q1 + q2) = 2, 000 − 2(q1 + q2). It costs $400 to raise a JRT to sell. If Celina expects Aidan to sell q2 JRTs ,what will her own marginal revenue be if she herself sells q1 JRTs?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Aidan and Celina are the only sellers of Jack Russell terrier (JRT) in
Antigua. Celina chooses her profit-maximizing number of JRTs to sell, q1, based
on the number of JRTs that she expects Aidan to sell. Aidan knows how Celina
will react and chooses the number of JRTs that she herself will sell, q2, after
taking this information into account. The inverse demand function for JRTs is
P(q1 + q2) = 2, 000 − 2(q1 + q2).
It costs $400 to raise a JRT to sell.
If Celina expects Aidan to sell q2 JRTs ,what will her own marginal revenue be if she herself sells q1 JRTs?
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