Economics Question - PLEASE HELP!!!!

[skybolt_1]

OK, I have this horrible problem that NO ONE I have talked to can figure out - it is for my microeconomics class. If anyone can offer any insite into how to do it, I would really appreciate it.

Coke and Pepsi are two American soft drink companies that have been operating in Russia, part of the Soviet Union until 1991, for some time now. The market demand curve for soft drinks in Russia is given by Q = 119 - 0.5P. Coke's short-run total and marginal costs are given by STC = 3q^2 + 48q + 572 and SMC = 6q + 48. Pepsi's short-run total and marginal costs are given by STC = 6q^2 + 18q + 849 and SMC = 12q + 18.

a. If Coke and Pepsi form a cartel to market soft drinks in Russia, calculate the cartel's profit-maximizing price-quantity combination.

b. Calculate the profit-maximizing output produced by Coke and Pepsi.

c. Calculate the profits earned by each firm.

d. Calculate the profits earned by the cartel.


Thanks!

[Tomteriffic]

Forwarding this to my Most Esteemed Redheaded Spouse, the Econ Whiz.

[narayan]

Tough question. When you find out, I would be interested in knowing.

[glohworm]

skybolt_1

I received my BS and almost a Masters in Econ. and I can tell you one immutable fact about Economics, and that is, you cannot quantify it the way you posited it in your thread. That's why I got out of it. It's the human factor! There are so many variables, you cannot really set the parameters. It's been so many years ago, I wish I could help you more!

[skybolt_1]

Glohworm - after screwing around with this thing for like 3 hours i've pretty much reached the conclusion that it is impossible, as you say. I typed it in exactly as the professor gave it to us so either he screwed up or its a typo or something.

Correct me if I'm wrong but you ARE basically saying that theres no way to do it, right?

Thanks for the input everyone!

skybolt_1

[Tomteriffic]

My Most Esteemed Redheaded Spouse looked over my shoulder and made some noises and used some words I didn't recognize and basically said the same thing.

She had a course recently where the prof. did the same thing, gave either the wrong data set, or insufficient data to solve the problem. She wasted half a day on it then called him on it and he admitted his oops.

[narayan]

Glohworm, there is one phrase in Ecnomics that takes care of the human variable and others.

"All things being equal".