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Lizzie consumes cherries and apples. Her demand function for cherries is qc=m-20pc-40pa, where m is her...

Lizzie consumes cherries and apples. Her demand function for cherries is qc=m-20pc-40pa, where m is her income, pc is price of a pound of cherries, and pa is price of a pound apples. What is the revenue-maximizing amount of cherries sold to Lizzie, if her income is $1,000 and the price of a pound of apples is $10?

Group of answer choices

200

400

neither one is correct

300

100
Business   Economics   
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Homework Answers

Answer #1

Answer is qc = 300.

To answer this question, at first we need to find the total revenue. And in maximizing conditions, we know that the first differential of the total revenue (TR) with respect to the quantity of cherries (qc) equals zero. Detailed solution is given in the image below.

Hope this helps. Do hit the thumbs up. Cheers!

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