3. Philips Industries manufactures a certain product can be sold directly to retail outlets or to theSuperior Company for further processing and eventual sale as a completely different product.The demand function for each of these markets is:P = 60P2 = 40201%3DRetail Outlets:Q2Superior Company:where P and P2are the prices charged and Q, and Q2 are the quantities sold in therespective markets. Philips's total cost function for the manufacture of this product is:TC10 + 8(Q1 + Qz)%D(a)Determine Philips's total profit function.(b)What are the profit-maximizing price and output levels for the product in the two markets?(c)At these level of output, calculate the marginal revenue in each market.(d)What are Phillips's total profits if the firm is effectively able to charge different prices inthe two markets?(e)Calculate the profit-maximizing level of price and output if Phillips is required to chargethe same price per unit in each market. What are Phillips's profits under this condition?

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buips Industries manufactures a certain product can be sold directly to retail outlets or to the Superior Company for further processing and eventual sale as a completely different product. The demand function for each of these markets is: P = 60 P2 = Retail Outlets: 201 %3D Superior Company: 40 Q2 where P and Pzare the prices charged and Q, and Q2 are the quantities sold in the respective markets. Philips's total cost function for the manufacture of this product is: TC 10 + 8(Q1 + Q2) %3D (a) Determine Philips's total profit function. (b) What are the profit-maximizing price and output levels for the product in the two markets (c) At these level of output, calculate the marginal revenue in each market.

buips Industries manufactures a certain product can be sold directly to retail outlets or to the Superior Company for further processing and eventual sale as a completely different product. The demand function for each of these markets is: P = 60 P2 = Retail Outlets: 201 %3D Superior Company: 40 Q2 where P and Pzare the prices charged and Q, and Q2 are the quantities sold in the respective markets. Philips's total cost function for the manufacture of this product is: TC 10 + 8(Q1 + Q2) %3D (a) Determine Philips's total profit function. (b) What are the profit-maximizing price and output levels for the product in the two markets (c) At these level of output, calculate the marginal revenue in each market.

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

Chapter14: Pricing Techniques And Analysis

Section: Chapter Questions

Problem 3E

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