Question

1. ABC company can produce any quantity of cars with a fixed cost of 1 billion USD and marginal cost of 10,000 USD. It operates in two markets, each of which has the following demand function: \( \mathrm{P}_{\mathrm{E}}=30-\mathrm{Q}_{\mathrm{E}} / 50 \) (European market) \( P_{A}=24-Q_{A} / 100 \) (Asian market) Price and costs are in thousand USD and quantity is in thousand cars. a. Calculate the quantity and price that maximise profit in each market. What is ABC's maximum proft? b. If \( A B C \) is required to sell at the same price in both markets, what will its maximum profit be?

          1. ABC company can produce any quantity of cars with a fixed cost of 1 billion USD and marginal cost of 10,000 USD. It operates in two markets, each of which has the following demand function:
\( \mathrm{P}_{\mathrm{E}}=30-\mathrm{Q}_{\mathrm{E}} / 50 \) (European market)
\( P_{A}=24-Q_{A} / 100 \) (Asian market)
Price and costs are in thousand USD and quantity is in thousand cars.
a. Calculate the quantity and price that maximise profit in each market. What is ABC's maximum proft?
b. If \( A B C \) is required to sell at the same price in both markets, what will its maximum profit be?

1. ABC company can produce any quantity of cars with a fixed cost of 1 billion USD and marginal cost of 10,000 USD. It operates in two markets, each of which has the following demand function:
PE=30-QE / 50 (European market)
PA=24-QA / 100 (Asian market)
Price and costs are in thousand USD and quantity is in thousand cars.
a. Calculate the quantity and price that maximise profit in each market. What is ABC's maximum proft?
b. If A B C is required to sell at the same price in both markets, what will its maximum profit be?

Added by Jack G.

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