3033test3smpl - Sample Problems for Exam 3 ECO 3033 ME....

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Unformatted text preview: Sample Problems for Exam 3 ECO 3033 ME. 6%.” Problem A. Metalicca Corp. shreds scrap steel and sells it in tw the domestic market and the Far East market. The demand functions for weekly sales quantity in the two markets are: (domestic) od - 9.500 - sopd fl/r /9o -, 092? (Far East) Of - 10.200 - 4on ,0 _-_- gag-“0.15- dfide The above quantities are in tons, and rices do not in freight. The firm's total cost can be function: o markets, represented by the TC - 150(000 + 400, where Q is the tonnage sold in the two markets. .476: 9‘0 1. what two economic conditions must hold to gain from price disorimination? l, WMéafWW. é, /c:(/ a gywflem 4%., Assuming the firm practices price discrimination, what will be its price per unit in each of the two markets. of product will it sell be its total profit? /?0 ",Wépég : yo} Q6€rg7__&9___ @6164; combined weekly for the firm to be able 2. how many tons per week in each market, and what will amtfowfeo ; 45f=§§£ fig = 512,55 3. Calculate the firm’s total profit. " 7??” 442/, 250 +43% 2523 #540290 ~232pr = {95; secs ECO' 3033 Egoblem E. % Cowpoke Joe's, Inc. is a small firm in Houston that produces Rodeo T-shirts. Its wholly-owned subsidiary, Corona Graphics, is located in Crystal City and specializes in printing designs on T-shirts by the silk screen method. The market for this type of printing is perfectly competitive, and the going price for printing a shirt is $1.35. Corona Graphics is permitted to do subcontract work for other manufacturers of T-shirts. Cowpoke Joe's estimates its monthly total cost of production of shirts (up; including the printing) to be represented by the equation below: TCS -= 10,000 + 0.25QEs + 0.0010:l 53575621??? where QS is the number of shirts produced._ Meanwhile. the monthly total cost function of Corona Graphics is: MC =.rs’+.ooa¢ a» q”? 2 T w 5 0.15 0.00 3 , Cg 00 + 09+ cog where 09 is the number of shirts printed. If the demand curve facing Cowpoke Joe's for the T-shirts is as = 3,000 - 50093: g: /C".002Qr (a) How many shirts should Cowpoke Joe's sell? MM; : /¢ -. OwaS— maize: I: Afx-"flGGCP; '-" A35 ,wccgf: mm Qrisoo FF:- {b) What price should they charge per shirt? f§?:7 /§;-:c3cLQ <E$QQQ%D:= {flrozdl (c) How much silk-screen printing should Corona Graphics d0? ./S"—(~ooe Q? ‘73:? (d) Should Corona graphics do printing for other firms? If so, how much? If not, how much printing will Cowpoke Joe's have to buy elsewhere? (QM’Q, aqw’m: "(0:0 W, (e) what will be the total profit of the two—unit firm? firr’JC/WO e(qm~Qoo-§740_3qu : 7&820 A : Q7630 "900*300 “4200 =- Coo a 35+? = 2% ...
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This note was uploaded on 04/06/2012 for the course ECO 3033 taught by Professor Truett during the Spring '12 term at University of Texas.

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3033test3smpl - Sample Problems for Exam 3 ECO 3033 ME....

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