ou are the manager of a bakery that produces and packages bran buns. The bakery is a local monopoly. According to new research, a typical consumer’s daily inverse demand function for your bran buns is P=2−0.25Q. Your cost function of producing bran buns is C(Q)=Q. a)     Suppose your firm sells buns charging one per-unit price. Find the profit-maximising per-unit price, quantity of buns purchased by a typical consumer daily and the firm's profits. b) To boost the bakery's profits you decide to sell buns in a package of several units. Determine the optimal number of bran buns to sell in a single package and the optimum package price. Find profits the bakery earns

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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ou are the manager of a bakery that produces and packages bran buns. The bakery is a local monopoly. According to new research, a typical consumer’s daily inverse demand function for your bran buns is P=2−0.25Q. Your cost function of producing bran buns is C(Q)=Q.

a)     Suppose your firm sells buns charging one per-unit price. Find the profit-maximising per-unit price, quantity of buns purchased by a typical consumer daily and the firm's profits.

b) To boost the bakery's profits you decide to sell buns in a package of several units. Determine the optimal number of bran buns to sell in a single package and the optimum package price. Find profits the bakery earns.

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