Two-sided markets are economic platforms having two distinct user groups that provide each other with network...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Two-sided markets are economic platforms having two distinct user groups that provide each other with network benefits. Said differently, in such a market, the products being sold are complementary, and an increase in demand of one product is associated with an increase demand for the other. Suppose that the products being sold are products 1 and product 2. The demands for products 1 and 2 are denoted by q1 and q2 respectively. Similarly the prices for products 1 and 2 are denoted by p1 and p2 respectively. The demand for products 1 and 2 are given by: q1= 15-5*p1 - 2 p2 q2 = 12-4*p2 - 3*p1 a) Your company produces both products 1 and 2, and needs to determine prices p1 and p2 that will maximize the total revenue from the sale of both products. What are the optimal prices p1 and p2, and what is the total revenue? Provide your answer to two decimal places. (20 points) b) Due to competition, the firm would like to limit the maximum price of product 2 to be $0.50. What is the total revenue now? Provide your answer to two decimal places. Two-sided markets are economic platforms having two distinct user groups that provide each other with network benefits. Said differently, in such a market, the products being sold are complementary, and an increase in demand of one product is associated with an increase demand for the other. Suppose that the products being sold are products 1 and product 2. The demands for products 1 and 2 are denoted by q1 and q2 respectively. Similarly the prices for products 1 and 2 are denoted by p1 and p2 respectively. The demand for products 1 and 2 are given by: q1= 15-5*p1 - 2 p2 q2 = 12-4*p2 - 3*p1 a) Your company produces both products 1 and 2, and needs to determine prices p1 and p2 that will maximize the total revenue from the sale of both products. What are the optimal prices p1 and p2, and what is the total revenue? Provide your answer to two decimal places. (20 points) b) Due to competition, the firm would like to limit the maximum price of product 2 to be $0.50. What is the total revenue now? Provide your answer to two decimal places.
Expert Answer:
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
Students also viewed these general management questions
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? Do a [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in the textfor...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
(a) Alison has been self-employed for many years. Her profit for tax year 2020-21 is 6,380. Is she liable to pay Class 2 NICs for the year? (b) Amanda starts a business on 25 May 2020 and she is...
-
Two parallel, aligned disks, 0.4 m in diameter and separated by 0.1 m, are located in a large room whose walls are maintained at 300 K. One of the disks is maintained at a uniform temperature of 500...
-
What is the dimension of the vector space M35 of 3 5 matrices?
-
A \(1.00-\mathrm{m}\) length of wire is shaped into a rectangle, and another \(1.00-\mathrm{m}\) length of identical wire is shaped into a circle. Both wires then move at the same speed into and then...
-
Cost-plus and market-based pricing Best Test Laboratories evaluates the reaction of materials to extreme increases in temperature. Much of the companys early growth was attributable to government...
-
i. As at 30th June 2013, the following information was available from the records of SGR Limited. ii. Acheque of sh 2,720,000 drawn on 30th June was presented to the bank for payment on 16th July,...
-
The proposed rates were not in the range the CEO expected given the pricing analysis. The CEO has asked the pricing actuary to verify the total projected loss cost excluding potential large storm...
-
Based on the following infomation, calculate stockholders' equity: cash = $ 3 0 ; total curent liabilities = $ 8 0 ; accounts receivable = $ 3 0 ; inventoy = $ 9 0 ; net fixed assets = $ 2 2 0 ;...
-
What do you think are the main objectives of Islamic contracts? Derive these from the pillars and rules of Islamic contracts.
-
What is the difference between Qard and Dayn?
-
Which sentence places more emphasis on the seminar? a. An executive training seminar that starts June 1 will include four candidates. b. Four candidates will be able to participate in an executive...
-
List 11 techniques for improving your listening skills. Be prepared to discuss each.
-
Our social media engineers are excited to announce a new free app called Fan Boosters that we believe will get fans to share, like, and subscribe to your content. Revise the following sentences to...
-
The anchoring and adjustment heuristic states that: people use anchors that they're given to make decisions but they don't adjust from those anchors enough (and therefore are often inaccurate when...
-
On 1 July 2021, Croydon Ltd leased ten excavators for five years from Machines4U Ltd. The excavators are expected to have an economic life of 6 years, after which time they will have an expected...
-
On the Internet, or in the library, find the annual reports of four companies essentially in identical or similar industries in a given country or in different countries. Required Use questions from...
-
Multiple Choice Questions 1. In a capital increase, the difference between the price paid by the buyer for a companys common share and the par value of each share can be called (several possible...
-
Unilever is a Anglo-Dutch supplier of fast moving consumer goods. The two parent companies, Unilever N.V. and Unilever PLC, together with their group companies, operate as Unilever Group. The...
-
Indonesia produces about 60 percent of the worlds palm oil. Palm oil is used in the production of shampoo, ice cream, and chocolate. Assume that Switzerland does not produce palm oil but companies in...
-
An article in the Wall Street Journal stated that Chinas treatment of American know-how has been a central issue to U.S.-China trade tensions over the past five years. a. What does the article mean...
-
An article in the Wall Street Journal explained that despite rising national security tensions between the United States and China in 2023, trade between the two nations was rising. China is a...
Study smarter with the SolutionInn App