The Lone Star Transportation Company hauls coal and manufactured goods. The demand curve for its services by the coal producers is
PC = 495 - 5QC
where PC is the price (in dollars) per ton- mile of coal hauled and QC is the number of ton miles of coal hauled (in thousands). The demand curve for its services by the producers of manufactured goods is
PM = 750 - 10QM
where PM is the price (in dollars) per ton- mile of manufactured goods hauled, and QM is the number of ton-miles of manufactured goods hauled (in thousands). The firm's total cost function is
TC = 410 + 8(QC + QM)
where TC is total cost (in thousands of dollars).
a. What price should managers charge to haul coal?
b. What price should managers charge to haul manufactured goods?
c. If a regulatory agency were to require managers to charge the same price to haul both coal and manufactured goods, would this reduce the firm's profit? If so, by how much?