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Rockets Inc is a manufacturer of spaceships. The company makes its own engines and refuses to sell them to competitors. One division of Rockets Inc
Rockets Inc is a manufacturer of spaceships. The company makes its own engines and refuses to sell them to competitors. One division of Rockets Inc manufactures the engines and another division assembles the body and sells completed spaceships. The inverse demand for Rocket's spaceships is given by P = 120 - 6Q, where P is the price in Megabucks. and Q is the annual output quantity. The cost of producing Q engines is 150 + SQ and the remaining cost of assembling and selling Q spaceships is 80 + 4Q. a. What internal price for engines will maximize Rocket's overall prots? (2pts) b. What is that maximum annual prot? How many spaceships do they sell? (4pts) c. Under what circumstances would you advise Rockets Inc to sell engines separately? (2pts)
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