QUESTION 19 te rod ced atconstar marginal con orsiO The dema

QUESTION 19 te rod ced at·constar marginal con orsiO The demand for gans bom the two countries can be represented Awe on, pr ter eher netwo fou tr s AadB)bat a ,alwat with exh obe The guns ca OA-100-2p The weaposs produser is plarning to use multimackct (or group pr . What price wll it charge to country B and what quantity will it sell to country B O None of the above

Solution

ANSWER:

We need to find the marginal revenue and equate it to marginal cost of $10.

Qb = 80 - 4p

4p = 80 - Qb

p = 20 - 0.25Qb

mr = 20 - 0.5Qb

now we will equate 20 - 0.5Qb = 10

20 - 10 = 0.5 Qb

10 = 0.5 Qb

10 / 0.5 = Qb

Qb = 20

now we will put the value of Qb of 20 in the 1st equation.

Qb = 80 - 4p

20 = 80 - 4p

4p = 80 - 20

4p = 60

p = 60 / 4 = 15

so the price is $15 and Qb is 20 that is option a.