Tasty Inc. sells table salt to both retail grocery chains and commercial users (e.g., bakeries, snack food makers, etc.). The demand function for each of these markets is: Retail grocery chains: P1 = 180 − 8Q1 Commercial users: P2 = 100 − 4Q2 where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Tasty's total cost function (which includes a "normal" return to the owners) for salt is:
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Retail grocery chains:
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P1 = 180 − 8Q1
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Commercial users:
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P2 = 100 − 4Q2
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where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Tasty's total cost function (which includes a "normal" return to the owners) for salt is:
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TC = 50 + 20(Q1 + Q2)
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(a)
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Determine Tasty's total profit function.
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(b)
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Assuming that Tasty Inc. is effectively able to charge different prices in the two markets, what are the profit-maximizing price and output levels for the product in the two markets? What is Tasty's total profit under this condition?
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- Dalahla Company Limited, focusing on producing tooth paste (in units) has a demand function4? = 35 − 0.5?. If total fixed cost is GH¢80 and average variable cost per unit function is 3? −51+325/Q, where Q is number of tooth paste produced and P is the price per tooth paste (in GH¢).What is the total profit at the profit maximizing level of output, and what is the best pricing policyoption?Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Required. Determine the company’s total profit function. Also, (i) What are the profit maximizing levels of price and output for the two markets? (ii) Calculate the marginal revenues in each market.? 2. Now consider two cases: (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit…Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) b. consider two cases: (i) Company is effectively able to price discriminate in thetwo markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit maximizing levels of price,output, and the total profits? c. Analyze, with graphs, the two alternative pricing strategies available to the company.
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- Pierce Manufacturing determines that the daily revenue, in dollars, from the sale of x lawn chairs is R(x)=0.005x³ +0.02x² +0.5x Currently, Pierce sells 90 lawn chairs daily a) What is the current daily revenue? b) How much would revenue increase if 95 lawn chairs were sold each day? c) What is the marginal revenue when 90 lawn chairs are sold daily? d) Use the answer from part (c) to estimate R(91), R(92), and R(93) a) The current revenue is $ b) The revenue would increase by $ (Round to the nearest cent.) c) The marginal revenue is $ when 90 lawn chairs are sold daily. d) R(91) $ R(92) $ R(93) $AMCO is a firm producing tables in Spain. It has a fixed cost of 100$ and a cost per unit of production of 2$. The demand function for a table is given by: P = 60 - 4Q 1. Find the equations of TR and TC. 2. Write down the equation of the profit. 3. Find Qwhen TR = 0 (x-intercept/roots). 4. Find Qwhen TR is a maximum. 5. Deduce the maximum total revenue (TR max).PakPerfect Inc. estimates equation of its total costs of production as TC = 500 + 10Q + 5Q2 and market demand for its product as Qd = 105 – (1/2) P, where Q is quantity in units and P is price in Pak$. Write the equations of the firm’s costs, as a function of Q: Average Total Cost ATC Average Variable Cost AVC Average Fixed Cost AFC Given above costs can you determine what will be the firm’s production in Stage 1? What is the breakeven price and breakeven quantity for this firm? What is the shutdown price and quantity for this firm? Draw the firm’s costs in a graph as per your determination in (a). Label the breakeven and shutdown price and quantity using information in (b) and (c) above. Given the market price of Pak$ 50 how many units should the firm produce? how many firms are competing in this market in short-run? How many firms will be in the industry in the long-run? How do you interpret the profit or loss condition of PakPerfect? Use a two-panel graph of the Market and…