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1. {6 points) Profit Maximization with no price discrimination You are running a (small) chain of gourmet burger joints with two locations (San Antonio and
1. {6 points) Profit Maximization with no price discrimination You are running a (small) chain of gourmet burger joints with two locations (San Antonio and Laredo) TYou have been charging $10 for your burger meal (fries. burger and soft drink). Across both locations. you sell 2400 meals per week at this price 1When you raised the price to $ 13 for the burger meal. your sales across the two locations fell to 1800 meals per week. For your costs. you have xed costs of $3 000 per week across the two locations. In addition. it costs you six dollars per burger in Trariable costs (ingredients. labor etc.) A. What is your combined cost function across the two iocations B. Using the two prices above, estimate your combined demand function across the two iocations C. Using the combined demand function and cost function caicuiated above, caicuiate the profit maximizing price and quantity D. What are your {combined} weekiy profits across the Mo ins-cations? 2. (6pnints) Demand across the Mo mentions After taking your managerial economics class, you realize that you can probably raise your prots by price discriminating by charging different prices in the two locations. You then breakdown sales across the two locations In Laredo: You sold 960 burger meals per week at $10 and 600 meals at $13 In San Antonio: You sold 1440 meals per week at $10 and i200 meals at $ 13 A. Using the two prices above, estimate your demandfunction in Laredo. What wouid demand be at the optimai price from (21 ? B. Using the two prices above, estimate your demandfunction in San Antonio. What wouid demand be at the optimai price from Q1
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