Pricing in one market depends

Assignment Help Microeconomics

Reference no: EM13912316

A firm makes two products, x and y. Inverse demand for each shows that pricing in one market depends on sales in the other according to the equation:

Px=500−10x−1.5y and Py=250−2.5y−x

The firm faces the total cost as follows: TC=6000+100x+50y

a. What bundle of products (x∗ , y∗ ) should the firm produce?

b. What prices will the firm be able to charge for each product give production at (x∗,y∗)?

c. What profits result in this instance?

d. At (x∗ ,y∗ ), what are the values of dTRydx and dTRxdy ? Provide a short (one- or twosentence) explanation of each value.

Reference no: EM13912316

Questions Cloud

How much total interest will you have earned : You invest $1000 in a 5-year savings bond that pays 8% annual interest on the principal. How much total interest will you have earned after 5 years

Analytical case comparative analysis of profitability : Analytical case comparative analysis of profitability and financial leverage measures.

What is the objective of convergence : FASB and IASB have been working on a Convergence Project for over ten years. In a 1-page essay discuss the two standard-setters and the body of standards issued by each. What is the objective of convergence?

Prominently in the prospectus : Edward has reported prominently in the prospectus that the break-even occupancy for the first four years is 65%. This is the amount of office space that must be leased to cover the interest and general upkeep costs over the first four years

Pricing in one market depends : A firm makes two products, x and y. Inverse demand for each shows that pricing in one market depends on sales in the other according to the equation:What bundle of products (x∗ , y∗ ) should the firm produce.

Financial statements of a foreign subsidiary : A translation adjustment must be calculated and disclosed whenever financial statements of a foreign subsidiary are translated into the parent's reporting currency

Explain why operating income is different in parts e and f : Assume that the firm adds another product to its product line and that the new product sells for $20 per unit, has variable costs of $14 per unit, and causes fixed expenses in total to increase to $63,000 per month. Calculate the firm's operating inc..

Explicit costs for the firm : Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property.What are the annual explicit costs for the firm described above.

Discuss the increase in the provision of such information : Why are accounting standards for sustainability reporting (social and environmental reporting) urgently required? In your comments address the following:- Explain of social and environmental reporting and Discuss the increase in the provision of su..

User Account

All Pages