MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Question
Chapter 8, Problem 7CACQ
(A)
To determine
The inverse demand function of the firm is to be ascertained.
(B)
To determine
The profit maximizing level of output and price combination is to be explained.
(C)
To determine
The maximum profits is to be calculated.
(D)
To determine
Long run adjustments that should be expected is to be explained.
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Q1: Analytical part - 8%
Best Orange Juice Company is located in Oman. The cost function for total orange juice
production (x) is given by C(q) = 0.25x2. Their orange juice is demanded only in Muscat (Muscat
demand is Xm- 100-2Pm) and Salalah (Salalah demand is X 100-4Ps). Therefore, the total
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Answer:
Q1: Analytical part – 8%
Best Orange Juice Company is located in Oman. The cost function for total orange juice
production (x) is given by C(q) = 0.25x². Their orange juice is demanded only in Muscat (Muscat
demand is xm- 100-2Pm) and Salalah (Salalah demand is x,- 100-4P,). Therefore, the total
demand is x-Xm+ Xs# If the company can control the quantities supplied to each market, how many
should it sell in each location to maximize total profits? What price would it charge in each
location?
Answer:
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