Purchase Solution

total profit functions

Not what you're looking for?

Ask Custom Question

Philips Industries manufactures a certain product that 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

Retail Outlets: P1 = 60 - 2Q1

Superior Company: P2 = 40 - Q2

where P1 and P2 are the prices charged and Q1 and Q2 are the quantities sold in the respective markets. Phillip's total cost function for the manufacture of this product is

TC = 10 + 8(Q1 + Q2)

a. Determine Phillip's total profit functions.
b. What are the profit-maximizing price and output levels for the product in the two markets?
c. At these levels of output, calculate the marginal revenue in each market.

Purchase this Solution
Solution Summary

The total profit functions are scrutinized.

Solution Preview

a. Determine Phillip's total profit functions.

Total Revenue from Retail outlets=Price*Quantity=(60-2Q1)*Q1
TR1=60Q1-2Q1^2

Total Revenue from Superior Company=Price*Quantity=(40-Q2)*Q2
TR2=40Q2-Q2^2

Total Cost, TC=10+8(Q1+Q2)

Profit=Total Revenue-Total Cost
=TR1+TR2-TC
...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Determine the maximum profit

    in this case of production given cost functions, demand function, and total production amount.

  • Maximizing profit by charging different prices in NY and LA

    b. quantity, total revenue and profit when the company charges different prices in each market and maximizes its total profit. a) To find the joint demand function, first rearrange the separate demand functions: Pn = 150 - Qn Pl = 50 - Ql Rearranging

  • cost functions of a perfectly competitve firm

    The firm's average total cost is 20 +3q + 10/q, so its total cost for producing 1.33 units is TC = 20 +3(1.33) + 10/(1.33) = 31.51. So the firm is making a profit of $5.73 C) Take a look at the attached graph.

  • Profit Maximization

    The expert examines profit maximization production functions.

  • Equilibrium: Finding Profit Maximizing Output and Price

    Find the Profit. Total Cost (at Q=24950) = 1000+10*24950+0.05*24950^2=$31,375,625 Total revenue =Price*quantity=3752.5*24950=$93,624,875 Profit =TR-TC=31375625-93624875=$62,249,250 There are two problems.

  • Maximize Profit

    113416 Maximize Profit Functions If total cost in $ is given by C(x) = 2x^2 + 4x + 50 and total revenue in $ is given by R(x) = 100x where x is units, find the a. Profit function: b.

  • Monopolist Demand and Cost Function

    Total Revenue = TR = PQ = Q(100-3Q+4√A) = 100Q - 3Q2 + 4A1/2Q Total Cost = TC = 4Q2 + 10Q + A Total Profit = P = TR - TC = 100Q - 3Q2 + 4A1/2Q - (4Q2 + 10Q + A) = -7Q2 + 90Q + 4A1/2Q - A Now, set and Plugging this in for A1/2 in the first

  • Economics (Theoretical)

    Total revenue is 333.34 X 83.33 = 27777.22 total cost = 20 + (83.33)^2 = 6963.89 total profit is the difference, which is $20813.33 The expert determines what the marginal revenues and marginal cost functions are for a monopolist operating two different

  • Price Elasticity of Demand and Inverse Demand Function

    Calculate the profit maximization level of production (activity) and the total profit earned by the firm.

View More Related Solutions