Best Orange Juice Company is located in Oman. The cost function for total orange juiceproduction (x) is given by C(q) 3D0.25x². Their orange juice is demanded only in Muscat (Muscatdemand is Xm= 100-2Pm) and Salalah (Salalah demand is 100-4P,). Therefore, the totaldemand is x-St Xs. If the company can control the quantities supplied to each market, how manyshould it sell in each location to maximize total profits? What price would it charge in eachlocation?Answer

MC = dC/dx = 0.5x = 0.5xs + 0.5xm Pm = (100 - xm) / 2 = 50 - 0.5xm Ps = (100 - xs) / 4 = 25 - 0.25xs…

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-&nt 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?

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-&nt 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?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 3E

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