Next, consider a case that the integrated firm produce the product and sell directly toconsumers. Suppose the market demand is q = 70 - p. Marginal costs are constant and equalto 10.Find the optimal retail price (p¹):Find the quantity demanded (q) that corresponds to pi:Find the firm's profit (T) that corresponds to p 1) Suppose that market demand is linear, q = 70 - p. Marginal costs are constant and equal to 10.The upstream firm, which is a manufacturer, does not sell directly but through a singledownstream firm, which is a retailer. The manufacturer set the wholesale price w at stage 1. Atstage 2, the retailer who is assumed not to incur any costs except wholesale price (w), observesthe wholesale price and sets the retail price p.Find the optimal wholesale price (w*):Find the optimal retail price (p*):Find the quantity demanded (q*) that corresponds to p*:Find the manufacturer's profit (TM) that corresponds to p*:Find the retailer's profit (TR) that corresponds to p*:Find the overall channel profit (II* = TUM+ TUR):

Next, consider a case that the integrated firm produce the product and sell directly to consumers. Suppose the market demand is q = 70 - p. Marginal costs are constant and equal to 10. Find the optimal retail price (p): Find the quantity demanded (q) that corresponds to p Find the firm's profit (n) that corresponds to p

Next, consider a case that the integrated firm produce the product and sell directly to consumers. Suppose the market demand is q = 70 - p. Marginal costs are constant and equal to 10. Find the optimal retail price (p): Find the quantity demanded (q) that corresponds to p Find the firm's profit (n) that corresponds to p

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Consider a market where every firm and every potential entrant has the identical cost function C(q)…

A: C(q) = 3q3 − 6q2 + 6q.

Q: A price-taking firm's variable cost function is C = Q3, where Q is the output per week. It has an…

A: Total revenue and profit: The demand function reflects the inverse relationship with the price of…

Q: Use Excel or otherwoise to solve the following. A firm’s objective is to Maximize Profits. Demand is…

A: To calculate profit maximizing price in this question we are first required to calculate MR and MC…

Q: Demand Q(P)= 16,137-489P and Cost Function C(Q)= 11,296+170 Calculate profit maximizing quantity…

A: In economics, profit maximization is the short run or long run process by which a firm may determine…

Q: Demand for a product Z at a price of $p per item is given by and supply is given by [Select] (a)…

A: Product Z at a price of $p per item is given by :Demand: D (p) = 250 - 0.1p^2 - pand Supply: S(P) =…

Q: If the marginal cost to make a good is $181 and the price elasticity of demand is -8, what price…

A: In this case, we have to discuss the term mark-up price as well as cost, marginal cost and price…

Q: Use the following information to answer the question. You are managing a competitive co farm that…

A: There is a competitive market for corn. The price for corn either be $12 or $6 per bushel. The…

Q: Given a firm’s market demand curve as: P = -2.5Q + 300, where Q is quantity of the firm’s output…

A: Total revenue is the revenue earned from sale of output. Marginal revenue is the additional revenue…

Q: A ski resort faces daily demand given by P = a - Q, where a varies from day to day. Over a three-…

A: Consumer Surplus : Consumer surplus is a measure of the economic benefit that consumers receive…

Q: 2. There are two brands of cigarettes X, Y. The demand for each is as follows: Qx = 80 – 2p Qy = 60…

Q: Consider the following model of a firm. The firm can sell any number of units at the constant price,…

A: Marginal cost:Marginal cost is the additional unit that is added to the total cost. It is calculated…

Q: The market demand for a month's supply of a generic medicine is: Q = 400-0.5P. The demand can be…

A: Step 2 Step 3 : Step 4

Q: A microbrewery operates next to the Bushville Lake and uses water from the lake during production.…

A: The objective of the question is to determine the quantity of beer that will be produced by the…

Q: A profit-maximizing firm's total cost is given by C = 50 + 25Q where Q is the quantity produced.…

A: Total revenue is price multiplied by quantity. Variable cost is the cost that depends on output, it…

Q: Consider the following problem: Demand: q = 100-p Retailer: marginal cost of selling r = 10 per…

A: Vertical integration is a term that describes the arrangement in which the supply chain of a…

Q: A store estimates is customer inverse demand is P= 6.1 - 2.6Q, and the marginal cost of each rental…

A: PLEASE FIND THE ANSWER BELOW. MARGINAL COST: In economics, the marginal cost of production is the…

Q: important step in solving for the utility maximization of the consumer and the cost minimization e…

A: We have, TC = WL + RK Production function :- Q(K, L) is 10K0.2L0.65 W is 500 R is 1700 Q is 945

Q: Juice producers are price takers since they compete in a highly competitive market. The going rate…

A: Any amount of the good can be sold by a completely competitive company, which acts as a price taker.…

Q: Assume the following Demand Function: q+ 10p = 1250 Assume the following Average cost curve: 1000 AC…

A: Profit is maximized at a level where marginal revenue is equal to marginal cost.

Q: Window cleaning is a perfectly competitive market in Boston. The daily market demand for window…

A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…

Question

Next, consider a case that the integrated firm produce the product and sell directly to
consumers. Suppose the market demand is q = 70 - p. Marginal costs are constant and equal
to 10.
Find the optimal retail price (p¹):
Find the quantity demanded (q) that corresponds to pi:
Find the firm's profit (T) that corresponds to p

1) Suppose that market demand is linear, q = 70 - p. Marginal costs are constant and equal to 10.
The upstream firm, which is a manufacturer, does not sell directly but through a single
downstream firm, which is a retailer. The manufacturer set the wholesale price w at stage 1. At
stage 2, the retailer who is assumed not to incur any costs except wholesale price (w), observes
the wholesale price and sets the retail price p.
Find the optimal wholesale price (w*):
Find the optimal retail price (p*):
Find the quantity demanded (q*) that corresponds to p*:
Find the manufacturer's profit (TM) that corresponds to p*:
Find the retailer's profit (TR) that corresponds to p*:
Find the overall channel profit (II* = TUM+ TUR):

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose that the finance department of our favorite company, TVZ R US, determines that the total = 500+ 2x. The marketing department's cost of producing a amount of televisions is C (x) estimate of the demand function for televisions has not changed and remains p = 10 -0.01x. A) Write an equation for the profit of this company. B) Use the first derivative to find the marginal profit of the function you wrote in part A. C) Compute the second derivative and determine if the value you found in Part B is an absolute maximum or absolute minimum. D) Find the maximum profit of the company. E) At what price are profits maximized?
Fruit market (a perfectly competitive market), the industry demand and supply of tomato (a homogenous product) is given by the following equations respectively: Qd = 50 − P Qs = 1 + 3P The typical firm’s total cost is given by the following equation: TC = 10 + 0.5Q2 + 5Q What is the equilibrium price and quantity in this market? What is the firm’s MC function? What is the MR function? What is the profit maximizing level of output for the firm? How much profit is this firm earning? Show it graphically Is it short run or long run? Explain!
Firms in a competitive market can sell as much as they like at a market price of $16. The cost function for each firm is TC = 50 + 4Q +2Q². The associated marginal cost function is MC = 4 + 4Q and the point of minimum average cost is Q = 5. How much profit is each firm earning?
Feedback Imagine that the flat-screen TV market is made up of one large firm that leads the industry and sets its own price first, and another firm that follows the leader when deciding its own profit-maximizing strategy. The leader has a cost function of c₁ (91) = 5q1, and the follower has a cost function of CF (ar) = 4, where Q =q₁ + qr. Total market demand for flat-screen TVs is given by the function Q = 250.00-2p. Calculate the following values: Leading firm's production: q = Follower firm's production: qp = Equilibrium price: p= $49.37 9 OF 16 QUESTIONS COMPLETED 118.33 32.92 (Round to two decimals if necessary.) (Round to two decimals if necessary.) (Round to two decimals if necessary.) See Hint 4 VIEW SOLUTION SUBMIT ANSWER
In the following problem, find the profit maximizing quantity and graph the marginal revenue and marginal cost. Interpret your first-order condition in terms of marginal benefit and marginal cost. max π = (12 - Q)Q-20² 9
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $26, $14, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $14, $26, $34, and $42 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $3 $5 $10 $14 $26 $34 $42 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be widgets.
Assume a firm is producing at a quantity where marginal cost is higher than marginal revenue. Which of the following is true? 1) To maximize profit. the firm should produce a lower quantity. 2) To maximize profit, the firm should produce a higher quantity. 3) The firm is currently maximizing profit. 4) To maximize profit, the firm should double production.
A firm is a perfectly competitive producer and sells two goods X and Y, has demand function 0.1Px – 1.2 + 0.2X = 0 and 10P, – 320+40Y = 0 respectively. The total cost of producing these goods is given by : TC = x2 – 2XY – Y Find the maximum profit and the values of Q1 and Q2 at which this is achieved.
A firm faces the demand curve: P = 3,591 - 19Q. What is the firm's revenue maximizing price? Enter as a value (round to two decimal places if necessary).
Assume a competitive firm faces a market price of $200, C = 13q3 + 4q + 750 MC = q2 +4 Profit maximizing output = 14 What is the firm's profit maximizing price?
please explain why the answer is C
Q1. Given cost function f(x) = 1/2(c)(x2), where c>0, and demand curve y(z) = z-a, where a > 1 a). Compute price elasticity of demand. b). Draw a diagram showing marginal cost and marginal revenue c). Find price and output that maximize profits d). Find the markup (price divided by marginal cost). Does it increase or decrease based on elasticity of demand?