Each ton of ore mined from the ABC Mine produces 1 ounce of silver and 1 pound of lead. Marginal costs are $10 per ton of ore mined. The demand for silver is P_S = 11 – 0.00003Q_S and the demand for lead is P_L=0.4 – 0.000005Q_L where Q_S is ounces of silver and Q_L is pounds of lead. Calculate profit-maximizing sales quantities and prices for silver and lead.
Each ton of ore mined from the ABC Mine produces 1 ounce of silver and 1 pound of lead. Marginal costs are $10 per ton of ore mined. The demand for silver is P_S = 11 – 0.00003Q_S and the demand for lead is P_L=0.4 – 0.000005Q_L where Q_S is ounces of silver and Q_L is pounds of lead. Calculate profit-maximizing sales quantities and prices for silver and lead.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Each ton of ore mined from the ABC Mine produces 1 ounce of silver and 1 pound of lead. Marginal costs are $10 per ton of ore mined. The
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