Assume that Turbo is a firm that produces two kinds of flash-memory drives. Its deluxe model has the inverse demand equation: PD = 70 – .05QD, where Qp is the number of units sold per week. For its economy model, the price equation is: PE = 30 – .05QE. Turbo's marginal cost is $10 per unit for either drive, and it produces both on a single assembly line that has a maximum capacity of 875 drives per week. (a) Determine the profit-maximizing outputs and prices of the drives.

Assume that Turbo is a firm that produces two kinds of flash-memory drives. Its deluxe model has the inverse demand equation: PD = 70 – .05QD, where Qp is the number of units sold per week. For its economy model, the price equation is: PE = 30 – .05QE. Turbo's marginal cost is $10 per unit for either drive, and it produces both on a single assembly line that has a maximum capacity of 875 drives per week. (a) Determine the profit-maximizing outputs and prices of the drives.

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 15CQ

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