Solution:
First, determine the output to be produced:
MR = MC
MR for Beef = 60 – 2Q
MR for Hides = 80 – 4Q
Find the total MR fir both Hides and Beef:
60 – 2Q + 80 – 4Q = 140 – 6Q
MC = 30 + 5Q
140 – 6Q = 30 + 5Q
140 – 30 = 5Q + 6Q
110 = 11Q
Q = 10
Substitute Q in the demand functions to determine the prices:
Beef demand: 60 – 1Q
= 60 – 1(10) = 60 – 10 = 50
The price that should be charged for beef = 50
Hides demand: 80 – 2Q
= 80 – 2(10) = 80 – 20 = 60
The price that should be charged for Hides = 60
The units of the product package that should be produced = 10 units
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