Maurice Tutor

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Teaching Since: May 2017
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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 13 Oct 2017 My Price 5.00

Joint Product Pricing.

Joint Product Pricing. Each ton of ore mined from the Baby Doe Mine in Leadville, Colorado, produces 1 ounce of silver and 1 pound of lead in a fixed 1:1 ratio.

Marginal costs are $10 per ton of ore mined. The demand and marginal revenue curves for silver are

and the demand and marginal revenue curve for lead are

where QS is ounces of silver and QL is pounds of lead.

A. Calculate profit-maximizing sales quantities and prices for silver and lead.

B. Now assume that wild speculation in the silver market has created a fivefold (or 500%) increase in silver demand. Calculate optimal sales quantities and prices for both silver and lead under these conditions.

Answers

Maurice Tutor
(5)
Status NEW Posted 13 Oct 2017 04:10 PM My Price 5.00

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