Consolidated Salt company sells table salt to both retail grocery chains and commercial users (e.g. bakeries, snack food makers, etc). The demand function for each of these markets is:
Retail grocery chains: P1= 180 - 8Q1
Commercial users: P2= 180 - 4Q2
Where P1 and P2 are the prices charged and Q1and Q2 are the quantities sold in the respective markets. Consolidated Company's total cost function (which includes a "normal" return to the owners) for salt is:
Assuming that consolidated is required to charge the same price in each market, what are the profit-maximizing price and output levels? What is Consolidated Company's total profit under this condition?