Suppose a small town has two bakeries: Bakery A and Bakery B. The residents of the town have different preferences when it comes to buying bread. Bakery A produces high-quality bread and charges a price of $5 per loaf, while Bakery B produces standard-quality bread and charges a price of $3 per loaf. The demand for bread in the town can be represented by the following equations: Q_A = 200 - 10P_A + 4P_B Q_B = 150 - 6P_B + 2P_A Where: Q_A and Q_B are the quantities of bread demanded from Bakery A and Bakery B respectively. P_A is the price charged by Bakery A.
Suppose a small town has two bakeries: Bakery A and Bakery B. The residents of the town have different preferences when it comes to buying bread. Bakery A produces high-quality bread and charges a
Q_A = 200 - 10P_A + 4P_B Q_B = 150 - 6P_B + 2P_A
Where: Q_A and Q_B are the quantities of bread demanded from Bakery A and Bakery B respectively. P_A is the price charged by Bakery A. P_B is the price charged by Bakery B.
a) Calculate the quantities of bread demanded from Bakery A and Bakery B when P_A = $5 and P_B = $3.
b) Calculate the quantities of bread demanded from Bakery A and Bakery B when P_A = $6 and P_B = $2.
c) If Bakery A and Bakery B collaborate and decide to charge the same price, what price should they charge to maximize their combined revenue? Calculate the price and the corresponding quantity of bread sold.
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