Mixed price bundling 17 UNIVERSIT Exercises: Price Determination A7) As an emplo

Question

Mixed price bundling 17 UNIVERSIT Exercises: Price Determination A7) As an employee of a major oil company, you are responsible for gasoline prices in Germany and Switzerland. Your market research department has determined the following price-volume functions for both countries (sales volume x in million liters per day; price p in ) Germany (G): Switzerland (S): xdpa) = 3.6-1.8Pa xs(ps)=0.6-02ps . You are producing the gasoline for both countries in a refinery. You are facing the following costs fixed costs in the amount of 245,000 . variable cost of 0.40 / liter a) First assume that you set a unit price of gasoline in both countries Determine the profit-maximizing price, the respective sales volumes in both countries and the total profit. Round your results to two decimal places 18

Explanation / Answer

So by diff:

Total x = 4.2-2 P Profit = X*P-245000-40X = (P-40)X-245000 = (-2P^2+4.2P-168+80P-245000)

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