Consolidated Salt Company Sells Table Salt to Both Retail Grocery

question 13

Essay

Consolidated Salt Company sells table salt to both retail grocery chains and commercial users (e.g. ,bakeries,snack food makers,etc. ).The demand function for each of these markets is:


where P₁ and P₂ are the prices charged and Q₁ and Q₂ are the quantities sold in the respective markets.Consolidated's total cost function (which includes a "normal" return to the owners)for salt is:

TC = 50 + 20(Q₁ + Q₂)

(a) Determine Consolidated's total profit function.
(b) Assuming that Consolidated is effectively able to charge different prices in the two markets, what are the profit-maximizing price and output levels for the product in the two markets? What is Consolidated's total profit under this condition?
(c) Assuming that Consolidated is required to charge the same price in each market, what are the profit-maximizing price and output levels? What is Consolidated's total profit under this condition?

---

Definitions:

Colonial Girls

Young females living in a colony, especially during the period when the area was under the control of a colonial power.

Bundling

A business strategy that involves offering several products or services together as a combined package.

Wooden Board

A flat piece of wood, often used for construction, crafting, or as a cooking utensil.

Fully Dressed

The state of wearing complete attire appropriate for the occasion, leaving no part of the body indecently exposed.