PS4_2009 - UNIVERSITY OF CALIFORNIA HAAS SCHOOL OF BUSINESS...

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UNIVERSITY OF CALIFORNIA HAAS SCHOOL OF BUSINESS EWMBA 201A—Economic Analysis for Business Decisions Fall 2009 Felix Várdy Problem Set #4 Doing these problems is optional. The solutions to these questions will be posted by Friday, September 25 and discussed in section on Saturday, September 26. As always, the educational value of these exercises will be maximized if you attempt to answer these questions before you look at the answers. Question 1 Toscanini’s, a Boston firm, has the patent on gingersnap molasses ice cream. It decides to introduce it to the Bay Area, where it proves to be an enormous hit in both San Francisco County and Marin County. Ice cream does not travel well, and the congestion on the Golden Gate Bridge is so bad that it is impossible to transport the ice cream across the bridge. Consequently, Toscanini's builds two identical plants, one in San Francisco and the other in Sausalito. For either plant, the daily cost of Q gallons of ice cream is 2Q. The daily demand for gingersnap molasses ice cream in San Francisco County is Q SF = 35,000 - 5000p. The daily demand for gingersnap
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This note was uploaded on 09/21/2009 for the course EWMBA 201A taught by Professor Wolfram during the Fall '07 term at University of California, Berkeley.

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PS4_2009 - UNIVERSITY OF CALIFORNIA HAAS SCHOOL OF BUSINESS...

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