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Math Help - econ equation help

  1. #1
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    econ equation help

    1. Suppose that Saudi Arabia letsother members of OPEC sell all they want at the existing price, which theSaudis set and the other members accept. The demand for oil is P=96 – 2Q, whereP is the price per barrel of oil and Q is the total quantity demanded (inmillions of barrels per day). The total amount supplied by the other members ofOPEC is equal to QR where QR = 0.58P. The Saudis’marginal cost curve is given by MC = 3.02QS, where QS is Saudioutput.
    (10 marks total)
    a) At what output level should theSaudis operate to maximize profit? (2 marks)
    b) What price should they charge?(2 marks)
    c) How much will the industry as awhole produce at this price? (2 marks)
    d) Graph this market. (4 marks)
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  2. #2
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    Re: econ equation help

    Quote Originally Posted by johndeere9530 View Post
    1. Suppose that Saudi Arabia letsother members of OPEC sell all they want at the existing price, which theSaudis set and the other members accept. The demand for oil is P=96 – 2Q, whereP is the price per barrel of oil and Q is the total quantity demanded (inmillions of barrels per day). The total amount supplied by the other members ofOPEC is equal to QR where QR = 0.58P. The Saudis’marginal cost curve is given by MC = 3.02QS, where QS is Saudioutput.
    (10 marks total)
    a) At what output level should theSaudis operate to maximize profit? (2 marks)
    b) What price should they charge?(2 marks)
    c) How much will the industry as awhole produce at this price? (2 marks)
    d) Graph this market. (4 marks)
    We don't supply answers we supply help.

    Usually, it is best to state the supply and demand functions in terms of Q as the dependent variable and P as the dependent variable.

    D(P) = the market demand function for oil. What is D(P) algebraically?

    What is the Saudi total revenue function?

    So what is the Saudi's marginal revenue function?

    What next?
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  3. #3
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    Re: econ equation help

    I meant P as the independent variable in the previous post. Shame on me for not proofing carefully.
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