Novartis produces a unique kind of test strips for measuring blood sugar level and has a monopoly in the market. The company is is approved by the European Union to market its product separately in Northern Europe and Southern Europe. The inverse demand function in Northern Europe is given by PN = 59 - 1.5QN and the inverse demand function in Southern Europe is given by PS = 45 - 2QS. Therefore the total revenue function for Northern Europe is given by TRN = 59QN - 1.5QN2 and the total revenue function for Southern Europe is given by TRS = 45QS - 2QS2 . Test strips are sold in a pack of 30 strips and the marginal cost of producing each pack is 5 Euros. PN = Price in Northern Europe in Euros; PS = Price in Southern Europe in Euros; QN = Quantity sold in Northern Europe; QS = Quantity sold in Southern Europe. What will be the profit from the Southern European Market? a. 0.00 Euro b. 198.00 Euro c. 72.00 Euro d. 200.00 Euro
-
Novartis produces a unique kind of test strips for measuring blood sugar level and has a
monopoly in the market. The company is is approved by the European Union to market its product separately in Northern Europe and Southern Europe. The inversedemand function in Northern Europe is given by PN = 59 - 1.5QN and the inverse demand function in Southern Europe is given by PS = 45 - 2QS. Therefore the total revenue function for Northern Europe is given by TRN = 59QN - 1.5QN2 and the total revenue function for Southern Europe is given by TRS = 45QS - 2QS2 . Test strips are sold in a pack of 30 strips and the marginal cost of producing each pack is 5 Euros. PN = Price in Northern Europe in Euros; PS = Price in Southern Europe in Euros; QN = Quantity sold in Northern Europe; QS = Quantity sold in Southern Europe. What will be the profit from the Southern European Market?a. 0.00 Euro
b. 198.00 Euro
c. 72.00 Euro
d. 200.00 Euro
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
