An energy supply firm has the following deman curves for both domestic(m) and co

Question

An energy supply firm has the following deman curves for both domestic(m) and commercial(c) consumers of its product: Qm=40-5Pm, Qc=60-10Pc. The total cost function for the firm (C) is described by the following equation: C(Q)=120+0.025Q^2, Where Q=Qm+Qc
(a) Dertermine the profit maximizing level of output to be produced and sold in each submarket.
(b) What price should the firm charge in each submarket?
(c) Evaluate the price elasticity of deman in each submarket and briefly comment on their relevance in the determination of the relative pirces in both markets.

Please answer the question and I do not need a process answer. I want to see details. thanks

Explanation / Answer

Qm=40-5Pm.....1 Qc=60-10Pc.......2 C(Q)=120+0.025Q2 , where Q= Qm+Qc .......3 profit = C(Q) - Pm.Qm - Pc.Qc substitute Qm and Qc and Q= Qm + Qc ; Q = 40-5Pm + 60-10Pc = 0 It will lead us to the answer b. put answer of a. in equation 1 and 2 to get prices c. find dP/dQ for both equation 1 and 2.

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