Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the firm's total profit function for TC=20+4(Q1 +Q2)? Please review below problem and assist with completing blanks. Thank you! A U.S. export-import shipping

image text in transcribedimage text in transcribed

What is the firm's total profit function for TC=20+4(Q1 +Q2)?

Please review below problem and assist with completing blanks. Thank you!

image text in transcribedimage text in transcribed
A U.S. export-import shipping company operates a general cargo carrier service between New York and several western European ports. It hauls two major categories of freight: manufactured items (Q1) and semimanufactured raw materials (Q2). The demand functions for these two classes of goods are: P1:2007Q1 P22807622 where Qi = tons of freight moved. The total cost function for the United States is TC:20+4(Q1+Q2) The profit-maximizing levels of price and output for manufactured items are per ton and E tons, respectively. The profit-maximizing levels of price and output for semimanufactured raw materials are per ton and E tons, respectively. At these levels of output the marginal revenue in the manufactured items market is and the margina! revenue in the semimanufactured raw materials market is . At these prices, the price elasticity of demand in the manufactured items market is V and the the price elasticity of demand in the semimanufactured raw materials market is V . (Hint: ED : MillP) What are the total profits if the company is effectively able to charge different prices in the two markets? . If the company is required by law to charge the same perton rate to all users, the new prot-maximizing level of price and output are per ton and \\: tons respectively. The total profits in this situation is

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

Bank Management

Authors: Timothy W Koch, Mark S Cracolice

7th Edition

1111804265, 9781111804268

More Books

Students also viewed these Economics questions