ms, newspapers, his convenience store. Noting his small business is not thriving, he thought of selling hot pies and rolls too. Suppose the total cost function for rolls and pies is, TC = 800 + 53Q, Q = Q1+ Q2 %3D where Q1 and Q2 denote the quantities of rolls and pies respectfully. If P, and P2 denote the corresponding prices, then the inverse demand equations are: = 73 – P, and 0.5Q2 = 100 – P2
ms, newspapers, his convenience store. Noting his small business is not thriving, he thought of selling hot pies and rolls too. Suppose the total cost function for rolls and pies is, TC = 800 + 53Q, Q = Q1+ Q2 %3D where Q1 and Q2 denote the quantities of rolls and pies respectfully. If P, and P2 denote the corresponding prices, then the inverse demand equations are: = 73 – P, and 0.5Q2 = 100 – P2
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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please help me with the question in the picture
Transcribed Image Text:James mainly selis confectionery items, newspapers, magazines and cigarettes in
his convenience store. Noting his small business is not thriving, he thought of
selling hot pies and rolls too.
Suppose the total cost function for rolls and pies is,
TC = 800 + 53Q, Q = Q1+ Q2
where Q, and Q2 denote the quantities of rolls and pies respectfully. If P, and P2
denote the corresponding prices, then the inverse demand equations are:
Q1 = 73 –
P1 and 0.5Q2 = 100 –
P2
![d) If James decides to make a total of 51rolls and pies per day and charges
different prices as above (that is, P1 # P2 ), how many of rolls and pies each
should he make in order to maximize the profit of a particular day? Estimate the
increase in maximum profit which results when the total number of rolls and pies
per day (51) is increased to 52 [note: assume second-order conditions are
satisfied].](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3551a707-99a1-4bf6-98fb-ad7040579d6e%2F1bcc4598-f47b-408c-8064-8ffb453b2548%2Fiehpr3_processed.png&w=3840&q=75)
Transcribed Image Text:d) If James decides to make a total of 51rolls and pies per day and charges
different prices as above (that is, P1 # P2 ), how many of rolls and pies each
should he make in order to maximize the profit of a particular day? Estimate the
increase in maximum profit which results when the total number of rolls and pies
per day (51) is increased to 52 [note: assume second-order conditions are
satisfied].
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