Question

Sal’s satellite company broadcasts TV to subscribers in Los Angeles and New York. The demand functions...

Sal’s satellite company broadcasts TV to subscribers in Los Angeles and New York. The demand functions for each of these two groups are

QNY =150−0.75PNY QLA=80−0.25PLA

where Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given by C = 1000 + 40Q where Q = QNY + QLA

What are the profit-maximizing price and quantity for Los Angeles?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Since there is only one broadcaster, he will maximize the joint profit

profit = PNY*QNY + PLA*QLA - C

to maximize the profit, we will partially differentiate profit first w.r.t QNY and then w.r.t QLA

and set it equal to zero.

the calculation below:---

Hence the profit-maximizing QLA = 35 &

profit-maximizing PLA = $180

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Sal’s satellite company broadcasts TV to subscribers in Los Angeles and New York. The demand functions...
Sal’s satellite company broadcasts TV to subscribers in Los Angeles and New York. The demand functions for each of these two groups are QNY =150−0.75PNY QLA=80−0.25PLA where Q is in thousands of subscriptions per year and P is the subscription price per year. The cost of providing Q units of service is given by C = 1000 + 80Q where Q = QNY + QLA What are the profit-maximizing price and quantity for Los Angeles? A. $140, 45 B. $190,...
To attract more subscribers, A New York City daily newspaper called “Manhattan Today” offered new subscribers...
To attract more subscribers, A New York City daily newspaper called “Manhattan Today” offered new subscribers the ability to pay $510 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The annual subscription normally charges a fee of $540. Customers prepay their subscriptions and receive 270 issues over the year. The list price of a carriage ride is $500 per hour. The company...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Pandora is the Internet’s most successful subscription radio service. As of June 2013, it had over...
Pandora is the Internet’s most successful subscription radio service. As of June 2013, it had over 200 million registered users (140 million of which access the service via a mobile device) and over 70 million active listeners. Pandora now accounts for more than 70% of all Internet radio listening hours and a 7% share of total U.S. radio listening (both traditional and Internet). At Pandora, users select a genre of music based on a favorite musician, and a computer algorithm...
You are to prepare a two-page (single-spaced) paper based on the case assigned. The case is...
You are to prepare a two-page (single-spaced) paper based on the case assigned. The case is listed below. Case Note Format Your case analysis should be in the format of a two page (not counting the reference section) single-spaced Executive Summary. The report should follow the following format in sentence/paragraph form using APA format to cite sources. You are required to cite the textbook and at least one outside source from an academic peer-reviewed article. 1. Introduction of Firm 2....
Exploring Innovation in Action Power to the People – Lifeline Energy Trevor Baylis was quite a...
Exploring Innovation in Action Power to the People – Lifeline Energy Trevor Baylis was quite a swimmer in his youth, representing Britain at the age of 15. So it wasn’t entirely surprising that he ended up working for a swimming pool firm in Surrey before setting up his own company. He continued his swimming passion – working as a part-time TV stuntman doing underwater feats – but also followed an interest in inventing things. One of the projects he began...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT