Sal's satellite company broadcasts TV to subscribers in Los Angeles and New York. The demand functions for each of these two groups are:QNY= 60 – 0.25PNYQLA= 100 – 0.5PLAwhere Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given byC = 1000 + 40Qwhere Q = QNY + QLA:a. What are the profit-maximizing prices and quantities for the New York and Los Angeles markets? (round all answers to two decimal places)In New York, the equilibrium quantity issubscribers at an equilibrium price of $.While in Los Angeles, the equilibrium quantity is subscribers at an equilibrium price of $.

profit maximization is the short run or long run process by which a firm may determine the price, input and output levels that lead to the highest profit here we calculate the given as follow,GIVEN; Demand function for each groups=QNY=60 - 0.25PNY QLA=100- 0.5PLA COST=1000-40Q Q=QNY +QLA MC = dC/dQ = 40 (i) In New York: PNY = (60 - QNY) / 0.25 = 240 - 4QNY TR = PNY x QNY = 240QNY - 4QNY2 MR = dTR/dQNY = 240 - 8QNY Setting MR = MC, 240 - 8QNY = 40 8QNY = 200 QNY = 25.00 P = 240 - (4 x 25) = 140.00 (ii) In Los Angeles, PLA = (100 - QLA) / 0.5 = 200 - 2QLA TR = PLA x QLA = 200QLA - 2QLA2 MR = dTR/dQLA = 200 - 4QLA Setting MR = MC, 200 - 4QLA = 40 4QLA = 160 QLA = 40.00 PLA = 200 - 2 x 40 PLA= 120.00

Business

Economics

ar's satellite company broadcasts IV to subscribers in LOS Angeles and New York. The demand functions for each of these two groups are: QNY = 60 - 0.25PNY QLA = 100 – 0.5PLA here Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given by C = 1000 + 40Q where Q = QNY + QLA: . What are the profit-maximizing prices and quantities for the New York and Los Angeles markets? (round all answers to two decimal places) In New York, the equilibrium quantity is subscribers at an equilibrium price of $ While in Los Angeles, the equilibrium quantity is subscribers at an equilibrium price of $

ar's satellite company broadcasts IV to subscribers in LOS Angeles and New York. The demand functions for each of these two groups are: QNY = 60 - 0.25PNY QLA = 100 – 0.5PLA here Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given by C = 1000 + 40Q where Q = QNY + QLA: . What are the profit-maximizing prices and quantities for the New York and Los Angeles markets? (round all answers to two decimal places) In New York, the equilibrium quantity is subscribers at an equilibrium price of $ While in Los Angeles, the equilibrium quantity is subscribers at an equilibrium price of $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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