Suppose the daily demand for Coke and Pepsi in a small city are given by Q_C = 90 - 100P_C + 400(P_P - P_C)and Q_P = 90 - 100P_P + 400(P_C - P_P),where Q_C and Q_P are the number of cans Coke and Pepsi sell,respectively,in thousands per day.P_C and P_P are the prices of a can of Coke and Pepsi,respectively,measured in dollars.The marginal cost is $0.45 per can for both Coke and Pepsi.If P_P = $0.75,what is Coke's demand function?

Question

Quizplus · Accepted Answer

Substitute P_P = $0.75 into the demand function for Coke: Q_C = 90 - 100P_C + 400(0.75 - P_C) = 390 - 500P_C.

Suppose the Daily Demand for Coke and Pepsi in a Small