a. A company faces two markets (Market A and Market B) withdifferent characteristics so that the company applies third-degreeprice discrimination. The company's analysis results find that theelasticity of demand for market A is -5, while market B is -2. Ifthe company applies a price of Rp.5,000 per unit for Market A, whatprice should be applied for market B, so that the company's profitis maximum?
b. A diving equipment rental company at a diving site faces avariety of demands. During the holiday season (January, June, andDecember), the demand is very high with the inverse demand curve P= 196 – 0.5Q, where P = rental value per unit, and Q = the numberof equipment rented per month.
Meanwhile, for non-holiday months, the demand decreases slightlywith the estimated demand function as follows:
P = 116 – 0.5Q
It is also known that the total cost per month is the sameduring high-season and low season, that is TC = 200 – 4Q +0.5Q^2
. i. What is the profit maximizing price and quantity duringhigh-season and low season?
ii. How much profit does the company make in a year?
a. A company faces two markets (Market A and Market B) with different characteristics so that the company applies third-
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