Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A supplier is selling tomatoes in two cities, St. Louis and Kansas City. It costs him $1 per lb of tomatoes delivered in each city.

A supplier is selling tomatoes in two cities, St. Louis and Kansas City. It costs him $1 per lb of tomatoes delivered in each city. Let p1 be the price of a lb of tomatoes in St. Louis and p2 be the price of a lb tomatoes in Kansas City. The price-response curves in each city:

Antalya: d1(p1) = 500 - 100p1

Istanbul: d2(p2) = 1,200 - 200p2

Assuming the supplier can charge any price he likes, what prices should be charged for a lb of tomatoes in St. Louis and Kansas City to maximize total contribution? What are the corresponding demands, revenues, and total contributions in each city? What is the total demand, total revenue, and total contribution over the two cities?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Industries Of The Future

Authors: Alec Ross

1st Edition

1476753660, 9781476753669

More Books

Students also viewed these Economics questions