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Thread: Economics question, finding market price and profit?

  1. August 11th 2010, 08:47 PM #1
    brumby_3
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    Economics question, finding market price and profit?

    Market demand is P = 10 - (2/3Q). There are 2 firms, D and E. Both have cost functions TCi(qi) = 3+2*qi. Output choice is restricted - Firm D may choose either q*D = 4 or q = 6. Firm E may choose either Q*E = 4 or q = 3.

    a) Find the market price for each of the 4 possible output combinations.
    b) Find the profits received by each firm in each of the four possible output combinations.
    Last edited by brumby_3; August 11th 2010 at 09:20 PM.
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