Question content area

Part $1$

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

q Subscript Upper P Baseline equals $700$ minus $100$ Upper P Subscript Upper P

and

q Subscript Upper S Baseline equals $240$ minus $40$ Upper P Subscript Upper S

where q Subscript Upper P is the number of coffee drinks demanded by professionals and q Subscript Upper S is the number of coffee drinks demanded by students. Upper P Subscript Upper P is the price of a coffee drink for a$$ professional, and Upper P Subscript Upper S is the price of a coffee drink for a student. Solving the demand functions for the$$ price, P$,$ as a function of the quantity$$ demanded, q$,$ gives the two inverse demand functions for coffee for these two$$ groups:

Upper P Subscript Upper P Baseline equals $7$ minus $0\mathrm{.}01$ q Subscript Upper P

and

Upper P Subscript Upper S Baseline equals $6$ minus $0\mathrm{.}025$ q Subscript Upper S$.$

The cost of selling Q coffee drinks$$ is:

TC left parenthesis Upper Q right parenthesis equals $2$ Upper Q plus $100.$

Part $2$

The$$ profit$-$maximizing quantity of coffee drinks Kosty Koffie will sell to professionals is

$$

enter your response here and the quantity it will sell to students is

$$

enter your response here.

The price charged by Kosty Koffie for a coffee to a professional will be $$$

$$

enter your response here and the price charged to a student will be $$$

$$

enter your response here.

Part $3$

The amount of economic profit or loss that Kosty Koffie earns is $$$

$$

enter your response here.