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Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

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k<br />

The optimal amounts of QA and Q s are found by taking<br />

•the partials:<br />

(2) . 1" 611C 'IT (45* QA) =<br />

rtT Q."<br />

51, (3).<br />

, (Iasi 614 =0<br />

Equating ')Q.A and 1,ct s yields:<br />

(4) .<br />

which says only split modes when net discounted marginal<br />

revenues are equal and IT 1Th and ITs.<br />

Note 11. Consider two markets and two modes. The firm<br />

must look at,<br />

(1). + = mc<br />

MR A<br />

(2): . MC<br />

(3). „1 ,c<br />

A i'vmS<br />

(4). '‘Mit2 + Mki = MC<br />

A<br />

In cases (1) and (3) it is possible to notice a firm<br />

shipping by different modes. However, this is an aggregation<br />

problem because of the two markets involved.<br />

...sewooMem.<br />

59

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