Hirsty
Lv 5
Hirsty asked in Social ScienceEconomics Β· 6 months ago

A firm can sell its products in two countries. Quantity demanded in the first country is given by?

π‘ž =99/2-1/2p

and in the second country

𝑄 = 99 βˆ’ 𝑃

The firm’s total output is q+Q which it can produce at a total cost (TC) of

𝑇𝐢 = 50π‘ž + 50𝑄 + π‘žπ‘„ + 0.5π‘ž^2 + 0.5𝑄^2

Find

(i) the prices and outputs in each country that maximise profits

1 Answer

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  • Oiy
    Lv 5
    6 months ago

    The profit function is 99q-2q*2+ 99Q-Q*2-50q-50Q-qQ-0.5q*2-0.5Q*2

    Take the first derivative under the assumption that q is constant, set to zero, and vice versa if Q is constant.

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