Assume That Turbo Is a Firm That Produces Two Kinds

question 4

Essay

Assume that Turbo is a firm that produces two kinds of flash-memory drives.Its deluxe model has the inverse demand equation: PD = 70 - 0.05QD,where QD is the number of units sold per week.For its economy model,the price equation is: PE = 30 - 0.05QE.Turbo's marginal cost is $10 per unit for either drive,and it produces both on a single assembly line that has a maximum capacity of 875 drives per week.
(a)Determine the profit-maximizing outputs and prices of the drives.

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Definitions:

Aggregate

A total or combined amount, level, or sum of different components, often used in economics to describe collective economic indicators.

Equilibrium

A state in a market where supply equals demand, and there are no external forces prompting change.

Farmland

Land used for farming and agricultural production.

Economic Rent

Extra income earned by a factor of production due to its scarcity or unique qualities, above what is necessary to bring it into use.