3. Exercise 14.3 A U.S. export-import shipping company operates a general cargo carrier service between New York and several western European ports. It hauls two major categories of freight: manufactured items (Q1) and semimanufactured raw materials (Q2). The demand functions for these two classes of goods are: P1=300Q1P2=80Q2 where Qi = tons of freight moved. The total cost function for the United States is TC=20+4(Q1+Q2) What is the firm's total profit function?

296Q1Q12+76Q2Q2220 299Q1Q12+60Q2Q2220 300Q1Q12+80Q2Q2220 296Q1Q12+76Q2Q22 The profit-maximizing levels of price and output for manufactured items are $ per ton and tons, respectively. The profit-maximizing levels of price and output for semimanufactured raw materials are $ per ton and tons, respectively. At these levels of output the marginal revenue in the manufactured items market is $ and the marginal revenue in the semimanufactured raw materials market is $ . At these prices, the price elasticity of demand in the manufactured items market is and the the price elasticity of demand in the semimanufactured raw materials market is . (Hint: ED=PMRP) What are the total profits if the company is effectively able to charge different prices in the two markets? $ . If the company is required by law to charge the same per-ton rate to all users, the new profit-