Banana Brothers, manufactures two types of Y Blocks: The Alfa and the Beta. Denoting Alfa output as Q1 and Beta output as Q2, the company has estimated the following demand equation for its Blocks: Q= 10 - 2P, - 0.4Q2 Q2 = 20 - 0.5P2 - 2Q1 The total cost equation for producing Alfa and Beta are TC = 4 + 20,? TC2 = 8 + 6Q,? a) If Banana Brothers is a profit-maximizing firm, how much should it charge for Alfa and Beta? b) What is the profit maximizing level of output for Alfa and Beta? c) What is Banana Brother's profit? %3! %3!
Banana Brothers, manufactures two types of Y Blocks: The Alfa and the Beta. Denoting Alfa output as Q1 and Beta output as Q2, the company has estimated the following demand equation for its Blocks: Q= 10 - 2P, - 0.4Q2 Q2 = 20 - 0.5P2 - 2Q1 The total cost equation for producing Alfa and Beta are TC = 4 + 20,? TC2 = 8 + 6Q,? a) If Banana Brothers is a profit-maximizing firm, how much should it charge for Alfa and Beta? b) What is the profit maximizing level of output for Alfa and Beta? c) What is Banana Brother's profit? %3! %3!
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Banana Brothers, manufactures two types of Y Blocks: The Alfa and the Beta. Denoting Alfa output as Q1
and Beta output as Q2, the company has estimated the following demand equation for its Blocks:
Q= 10 - 2P1 - 0.4Q2
Q2 = 20 - 0.5P2 - 2Q1
The total cost equation for producing Alfa and Beta are
TC, = 4 + 20,?
TC2 = 8 + 6Q,?
a) If Banana Brothers is a profit-maximizing firm, how much should it charge for Alfa and Beta?
b) What is the profit maximizing level of output for Alfa and Beta?
c) What is Banana Brother's profit?
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