A railway company has just obtained an exclusive contract for a new destination. Currently, there is no other company that markets an equivalent product.

P=300-2Q C(Q)=100+60Q+4Q² where P: represents the price and Q : a train ticket to that destination.

Question 1:

What price and quantity maximizes profit for this firm? You must show your calculations.

Question 2:

Calculate the profit of the firm with the combination chosen in the previous question.

Question 3:

Represent this firm graphically while indicating the various surpluses.

Question 4:

Calculate consumer surplus, producer surplus, and total surplus.

Question 5:

If any train company could offer the same route, what would be the equilibrium price and quantity?

Question 6:

Calculate consumer surplus, producer surplus, and total surplus.

Question 7:

Comparing the different surpluses, explain the difference between the initial situation and the final situation. Who wins, who loses and why? (3 points) Calculate the deadweight loss.