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Kosty Koffie is a coffee shop inBerkeley, California. The coffee market in Berkeley has two very different types of customers. There are many wealthy working

Kosty Koffie is a coffee shop inBerkeley, California. The coffee market in Berkeley has two very different types of customers. There are many wealthy working professionals and a large number of considerably less wealthy college students. The demand functions for coffee from these two groupsare, respectively:

qP=900100PP

and

qS=20040PS

where qP is the number of coffee drinks demanded by professionals and qS is the number of coffee drinks demanded by students. PP is the price of a coffee drink for aprofessional, and PS is the price of a coffee drink for a student. Solving the demand functions for theprice, P, as a function of the quantitydemanded, q, gives the two inverse demand functions for coffee for these twogroups:

PP=90.01qP

and

PS=50.025qS.

The cost of selling Q coffee drinksis:

TC(Q)=2Q+100.

  1. Theprofit-maximizing quantity of coffee drinks Kosty Koffie will sell to professionals is ??? and the quantity it will sell to students is ???
  2. The price charged by Kosty Koffie for a coffee to a professional will be $ ??? and the price charged to a student will be $ ???
  3. The amount of economic profit or loss that Kosty Koffie earns is $ ???

.

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