Ferdinand Sludge has just written a disgusting new book, Orgy in the Piggery. His publisher, Graw McSwill, estimates that the demand for this book in the United States is Q1 = 50 ,000 − 2,000P1, where P1 is the price in America measured in U.S. dollars. The demand for Sludge’s opus in England is Q2 = 10 ,000−500P2, whereP2 is its price in England measured in U. S. dollars. His publisher has a cost function C(Q) = 50,000 + 2Q, where Q is the total number of copies of Orgy that it produces. .a. If McSwill can charge different prices different countries, and wants to maximize profits, how many copies should it sell in the United States and England? What are the respective prices? .b. In which country the price is the highest and why? Explain.

Ferdinand Sludge has just written a disgusting new book, Orgy in the Piggery. His publisher, Graw McSwill, estimates that the demand for this book in the United States is Q1 = 50 ,000 − 2,000P1, where P1 is the price in America measured in U.S. dollars. The demand for Sludge’s opus in England is Q2 = 10 ,000−500P2, whereP2 is its price in England measured in U. S. dollars. His publisher has a cost function C(Q) = 50,000 + 2Q, where Q is the total number of copies of Orgy that it produces. .a. If McSwill can charge different prices different countries, and wants to maximize profits, how many copies should it sell in the United States and England? What are the respective prices? .b. In which country the price is the highest and why? Explain.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 10E

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