Suppose Ring Dental is the single supplier at HRM region provide the dental service and has a market demand curve Q = 40 – P; A total cost curve given by the formula: T C = 80 - 20Q + 2Q2 Find the profit-maximizing quantity, price, and profit. Now, suppose Halifax Dental wishes to separate the market and target to two different groups of customers young and old customers, the average cost = marginal cost = 10 for both markets Young custo

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Suppose Ring Dental is the single supplier at HRM region provide the dental service and has a market demand curve Q = 40 – P; A total cost curve given by the formula:

T C = 80 - 20Q + 2Q2

  1. Find the profit-maximizing quantity, price, and profit.

Now, suppose Halifax Dental wishes to separate the market and target to two different groups of customers young and old customers, the average cost = marginal cost = 10 for both markets

  • Young customers with elasticity = -5 and DA = 12000 - 65P
  • Old customers with elasticity = -7 and DB = 12000 - 55P
  1. What is the profit if Halifax Dental sets the equal price for both markets? (use the average elasticity for equal price)
  2. What is the profit if Halifax Dental charges different prices for each market?

 

 

 

 

 

 

 

 

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Production & Pricing Decisions
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education