k (b) Show that the point elasticity of the demand curve Q = 1, where k is a positive constant and n is an integer, is independent of the price p. (c) A producer has the possibility of discriminating between the domestic and foreign market for a certain product with the following demand functions: QD=22-0.1pp and QF = 45 -0.3pF where, PD, QD- price and demand in the domestic market and PF, QF price and demand in the foreign market. The total cost function is C = 1500 + 10Q where, Q = (QD + QF). (i) What prices should the producer charge in order to maximize his total profit? (ii) What is the maximum total profit the producer can get?
k (b) Show that the point elasticity of the demand curve Q = 1, where k is a positive constant and n is an integer, is independent of the price p. (c) A producer has the possibility of discriminating between the domestic and foreign market for a certain product with the following demand functions: QD=22-0.1pp and QF = 45 -0.3pF where, PD, QD- price and demand in the domestic market and PF, QF price and demand in the foreign market. The total cost function is C = 1500 + 10Q where, Q = (QD + QF). (i) What prices should the producer charge in order to maximize his total profit? (ii) What is the maximum total profit the producer can get?
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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(b) Show that the point elasticity of the demand curve Q = 1, where k is a positive
constant and n is an integer, is independent of the price p.
(c) A producer has the possibility of discriminating between the domestic and foreign market
for a certain product with the following demand functions:
QD=22-0.1pp and
QF = 45 -0.3pF
where, PD, QD- price and demand in the domestic market and
PF, QF price and demand in the foreign market.
The total cost function is C = 1500 + 10Q where, Q = (QD + QF).
(i) What prices should the producer charge in order to maximize his total profit?
(ii) What is the maximum total profit the producer can get?
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