The platypus is a shy and secretive animal that does not breed well in captivity. But two breeders, Sydney and Adelaide, have discovered the secret to platypus fer- tility and have effectively cornered the market. Zoos across the globe come to them to purchase their output; the world inverse demand for baby platypuses is given by P=1,000-20, where Q is the combined output of Sydney (qs) and Adelaide (qA).s quide a. Sydney wishes to produce the profit-maximizing mquantity of baby platypus. Given Adelaide's choice of bb output, 9A, write an equation for the residual demand faced by Sydney. ceutilong C. b. Derive Sydney's residual marginal revenue curve. Assume that the marginal and average total cost of ivou raising a baby platypus to an age at which it can be 0 sold is $200. Derive Sydney's reaction function.

The platypus is a shy and secretive animal that does not breed well in captivity. But two breeders, Sydney and Adelaide, have discovered the secret to platypus fer- tility and have effectively cornered the market. Zoos across the globe come to them to purchase their output; the world inverse demand for baby platypuses is given by P=1,000-20, where Q is the combined output of Sydney (qs) and Adelaide (qA).s quide a. Sydney wishes to produce the profit-maximizing mquantity of baby platypus. Given Adelaide's choice of bb output, 9A, write an equation for the residual demand faced by Sydney. ceutilong C. b. Derive Sydney's residual marginal revenue curve. Assume that the marginal and average total cost of ivou raising a baby platypus to an age at which it can be 0 sold is $200. Derive Sydney's reaction function.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

10. The platypus is a shy and secretive animal that does not
breed well in captivity. But two breeders, Sydney and
Adelaide, have discovered the secret to platypus fer-
tility and have effectively cornered the market. Zoos
across the globe come to them to purchase their output;
the world inverse demand for baby platypuses is given
avby P=1,000-20, where Q is the combined output of
blu Sydney (qs) and Adelaide (qA). vide
a. Sydney wishes to produce the profit-maximizing
quantity of baby platypus. Given Adelaide's choice of
output, 9A, write an equation for the residual demand
faced by Sydney.
19125
non c.
ab. Derive Sydney's residual marginal revenue curve.
Assume that the marginal and average total cost of
raising a baby platypus to an age at which it can be
sold is $200. Derive Sydney's reaction function.
d. Repeat steps (a), (b), and (c) to find Adelaide's reac-
tion function to Sydney's output choice.
18
e.
Substitute Sydney's reaction function into Adelaide's
to solve for Adelaide's profit-maximizing level
of output. Then use your answer to find Sydney's
profit-maximizing level of output.
f. Determine industry output, the price of platypus, and
the profits of both Sydney and Adelaide.
g. If Adelaide were hit by a bus on her way home from
work, and Sydney were to become a monopolist, what
would happen to industry quantity, price, and profit?
us bisn

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