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Good year tire company sells identical radical tires under t

Paper help Economics Good year tire company sells identical radical tires under t

Economics

Good year tire company sells identical radical tires under t

Good year tire company sells identical radical tires under the firms own brand name and to discount… Show more Good year tire company sells identical radical tires under the firms own brand name and to discount stores for private labeling. Marginal cost is constant at $10 per tire, regardless of the market its sold in. The firm has estimated the demand functions for each of it market to be: Pb= 70- 0.0005 Qb (b=brand name) Pg= 20- 0.0002 Qg (g=generic) 1) Write an equation expressing this firms total profits… Please write out the steps… 2) Determine the profit maximizing price and quantity in brand name market. I got …70-0.001 Qb=10 (why is it 0.0001) for the quantity and 70-0.0005 (60,000) for the price equation? 3) Determine the price elasticity of demand in each market I got …Eb= -2000 (40/60,000)=-80/60=-1/333 (where does the -2000 come from?) …Eg= -5000 (15/25000)=-3 (where does the -5000 come from) • Show less

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