Question
A small buisness sells a product with different demands throughout the week. The typical (inverse) demand on the weekdays (Monday through Friday) is P =20-4Q.
A small buisness sells a product with different demands throughout the week. The typical (inverse) demand on the weekdays (Monday through Friday) is P =20-4Q. The typical weekend (inverse) demand is P =40-4Q. Suppose marginal cost is zero and capacity on the weekend is 3. You should assume that Q is a value in the hundreds, however do not use this information in the calculation.
a. What is the profit maximizing quantity, price and profit on a weekday?
b.What is the profit maximizing quantity, price and profit on a weekend if the weekend price is the same as the weekday price?
c. What is the profit maximizing quantity, price and profit on a weekend if you employ peak load pricing?
d. Explain the steps needed to graphically represent this scenario using Excel.
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a Weekday Marginal revenue MR Demand curve 204Q Marginal cost MC 0 Equate MRMC ...Get Instant Access to Expert-Tailored Solutions
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