Assume That Turbo Is a Firm That Produces Two Kinds

question 41

Essay

Assume that Turbo is a firm that produces two kinds of flash-memory drives. Its deluxe model has the inverse demand equation: P_D = 70 - .05Q_D, where QD is the number of units sold per week. For its economy model, the price equation is: P_E = 30 - .05Q_E. 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.
(b) Suppose demand for the economy drive increases to: PE = 50 – .04QE. What are the profit-maximizing outputs and prices of the drives?

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Definitions:

Desired Value

The target or setpoint value that a system or process aims to achieve or maintain.

LED Display

A flat panel display that uses light-emitting diodes as pixels for a video display, common in consumer electronics and advertisement boards.

Logic

The system or principles underlying the arrangement and operation of a computer or complex electronic device focusing on conditional operations and decision-making.