Question
1.You manage a farm that is looking to sell oranges in both California and Oregon.The demand for oranges in California is given by P CA
1.You manage a farm that is looking to sell oranges in both California and Oregon.The demand for oranges in California is given by PCA= 25 - 0.5QCAand the demand for oranges in Oregon is POR= 19 - 0.3QOR.The total cost of selling oranges is TC = 10 + Q and the marginal cost is constant at MC = $1.
If you can differentiate between customers in California and Oregon, you should charge a price of $_____in California and a price of $______in Oregon.
2.You manage a farm that is looking to sell oranges in both California and Oregon.The demand for oranges in California is given by PCA= 25 - 0.5QCAand the demand for oranges in Oregon is POR= 19 - 0.3QOR.The total cost of selling oranges is TC = 10 + Q and the marginal cost is constant at MC = $1.
If you cannot differentiate between customers in California and Oregon, and you are forced to charge the price that is optimal in California in both Oregon and California, how much profit will you lose compared to the profit you made in (2)?(withoutthe negative signnor the dollar sign.)
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
