Question

The Financial Herald, a weekly newspaper specializing in corporate financial news, is purchased by both businesspeople and students. A marketing research firm has estimated the two linear demand and marginal revenue functions shown in the following figure. MR B is the estimated marginal revenue for the business readers, and MRS is the estimated marginal revenue for the student readers. The production department at The Financial Herald estimates a linear marginal cost function for newspaper production, which also is graphed in the following figure. All quantities are in units of 1,000 per week.


a. How many total copies should The Financial Herald print each week?
b. How many copies should be sold to business readers? How many copies should be sold to students?
c. What price should business readers be charged? What price should students becharged?


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  • CreatedNovember 18, 2014
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