Re: ISI PEB (Economics), 2014 ANSWERS 1 TO 5..

Posted by dhruv on May 02, 2015; 2:05pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-PEB-Economics-2014-ANSWERS-1-TO-5-tp7595987p7596524.html

@Rob

For constraints you have demand function for both student and non-student and an additional capacity constraint. You have to carry out optimization such that MR for each market is equal to MC. Also, you can substitute q1 = 150 - q2, and be able to get profits in terms of q2. Through usual first order conditions you can solve for q2 that maximizes profit, and then you will be able to calculate both p1 and p2, all subjected to the capacity constraint.