Suppose a firm sells two goods, Good A and Good B. Use the following information to Calculate the mark-up and the profit-maximizing price that the firm should change for Good B. Profit maximizing price of Good A = $6000 MC at profit-maximizing level of output of Good A = $1200 MC at profit-maximizing level of output of Good B = $400 Total revenue of Good A = $80000 Total revenue of Good B = $68000 Rothschild index of Good B = 0.6 Price elasticity of the market demand for Good B = -1.2

Suppose a firm sells two goods, Good A and Good B. Use the following information to Calculate the mark-up and the profit-maximizing price that the firm should change for Good B. Profit maximizing price of Good A = $6000 MC at profit-maximizing level of output of Good A = $1200 MC at profit-maximizing level of output of Good B = $400 Total revenue of Good A = $80000 Total revenue of Good B = $68000 Rothschild index of Good B = 0.6 Price elasticity of the market demand for Good B = -1.2

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 8WNG

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Question

Suppose a firm sells two goods, Good A and Good B. Use the following information to Calculate the mark-up and the profit-maximizing price that the firm should change for Good B.

Profit maximizing price of Good A = $6000

MC at profit-maximizing level of output of Good A = $1200

MC at profit-maximizing level of output of Good B = $400

Total revenue of Good A = $80000

Total revenue of Good B = $68000

Rothschild index of Good B = 0.6

Price elasticity of the market demand for Good B = -1.2

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