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Hello, I have a difficult time solving this problem: The gourmet boutique Choca-Shocka-Shop sells chocolate, for simplicity thought of as a continuous good. Also, for
Hello, I have a difficult time solving this problem:
The gourmet boutique Choca-Shocka-Shop sells chocolate, for simplicity thought of as a continuous good. Also, for simplicity, assume that production is cost- less, i.e. MC = 0. The shop faces two potential customers. The slightly richer Mrs. A whose demand function is given by DA() = max {20 - p, 0}, and the slightly less rich Mrs. B with DB(P) = max {16 - p, 0}. Determine the following: . Determine the quantity sold to A and B . Price pr. unit chocolate, or amount paid for a "package" for A and B . Consumer surplus for A and B . Profits for the chocolate sellerSOPD: qA = 20, SA = 152, CSA = 48, qR = 12, SB = 120, CSB = 0, n = 272, DWL = 8.max T =SA + SB - C(CA+B) SATA, SB,IB ubb. CSA(CA) 2 SA (1) CSB(TB) 2 SB (IRB) CSA(CA) - SA 2 CSA(TB) - SB (ICA) CSB(XB) - SB 2 CSB(XA) - SA (ICB)CSA() PA(t) dtStep by Step Solution
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