American eaglet sells surfing equipment in los angeles la, Ask an Expert

Economics

American Eaglet sells surfing equipment in Los Angeles (LA) and Honolulu (Hon). The demand functions for each of these two groups are QLA = 600 – 2.5PLA QHon = 800 – 4.0PHon where Q is the number sold and P is the price of the equipment. The cost of providing Q units of the equipment is given by

a. What is the profit-maximizing quantity for the Honolulu market? C=10,000+50Q whereQ=QHon +QLA.

b. What is the profit-maximizing price for the Honolulu market?

c. Based on the facts above, briefly explain whether the profit-maximizing price in Los Angeles would be the same or different than the price in Honolulu (no additional calculations are necessary).

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91960175

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