Demand function-profit fuction

Reference no: EM1367463

Acme Coffee Bean Company sells coffee beans to both retail grocery chains and commercial users (e.g., coffee shops, vending companies, 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. Acme's total cost function (which includes a "normal" return to the owners) for coffee is:
TC = 50 + 20(Q1 + Q2)

a) Determine Acme's total profit function.

b) Assuming that Acme 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 Acme's total profit under this condition?

c) Assuming that Acme is required to charge the same price in each market, what are the profit-maximizing price and output levels? What is Acme's total profit under this condition?

Reference no: EM1367463

Questions Cloud

Blood pressure in hypertensive adults : A nurse researcher wants to study the effects of yoga on blood pressure in hypertensive adults?

What can happen to hundredsof unsuspecting consumers : Do injured parties acting ethically when y promise to keep quiet know Illustrate what can happen to hundreds of unsuspecting consumers.

Write program to compute the volume flow rate : Write program to compute volume flow rate in cubic feet per second of water flowing through pipe of diameter d in inches and a velocity of v feet per second.

Calculate expected gdp growth : The firm produces a global positioning system that sells for $1,000 with costs of goods sold of 48 percent of sales. Compared to the US, China offers a 6 percent cost reduction

Demand function-profit fuction : Determine Acme's total profit function. Assuming that Acme 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 Acme's total profit und..

Calculate an approximate cross cost elasticity of demand : Calculate income elasticity of demand for both X and Y at that point. Calculate an approximate cross cost elasticity of demand for Y when Px changes from 5 to 6.

Estimate consumer and producer surplus before quota : Estimate aggregate consumer and producer surplus before quota. Estimate new consumer and producer surplus after quota.

Explain specific challenges of facing designer : Explain specific challenges of facing the designer, specifically with regard to limitations of hardware, software and interface design two paragraph each.

Examples of a medical office implementing ehr : Research and provide examples of a medical office that has implemented EHRs. How has it helped them? Has it created any negative aspects.

User Account

All Pages