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2.5 Suppose that you are a manager for a firm like EBC Brakes, which manufactures brakes for automobiles and motorcycles. Your company has two plants,
2.5 Suppose that you are a manager for a firm like EBC Brakes, which manufactures brakes for automobiles and motorcycles. Your company has two plants, one in the United States and the other in the United Kingdom. The following tables include the estimated demand and marginal revenue for your brakes, along with the marginal costs at the two factories. a. What quantity and price maximize your firm's profit? b. What is the profit-maximizing number of brakes produced in the U.S. plant? In the U.K. plant? Accompanies problem 2.5 . Quantity Demanded (brakes Price (dollars per Marginal Revenue (dollars per per hour) brake) brake) 104 $196 $92 105 195 90 194 88 106 107 193 86 108 192 84 191 82 109a. What quantity and price maximize your firm's profit? Summary: Decisions About Production, Products, and Location Quantity Produced in the Quantity Produced in the Marginal cost U.K. plant (brakes per U.S. plant (brakes per (dollars per hour) hour) brake) 47 42 $66 48 44 68 49 46 70 50 48 72 50 74 51 52 52 76 78 53 54 56 80 54 58 82 55 60 84 56 86 62 57Summary: Decisions About Production, Products, and Location uantity Produced in the Quantity Produced in the Marginal cost U.K. plant (brakes per U.S. plant (brakes per (dollars per hour) hour) brake) 47 42 $66 48 44 68 70 49 46 48 72- 50 50 74 51 52 76 52 54 78 53 56 80 54 82 58 55 84 60 56 86 62 57 W
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