Question
1. An industry is characterized by the following demand: P = 54-(Q/2). A multi-plant monopolist is the only producer in that market and it operates
1. An industry is characterized by the following demand:
P = 54-(Q/2).
A multi-plant monopolist is the only producer in that market and it operates three plants with the following cost functions:
MC1( Q1) = 2Q1
MC2( Q2) = 2+ Q2
MC3(Q3) =8 + 2Q3
a) What would be the price and the quantity produced in each plant?
b) Ignoring the specific demand given, is there a point when the firm may shut down any one of the three plants?
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Fundamentals of Managerial Economics
Authors: Mark Hirschey
9th edition
324584830, 978-0324588781, 032458878X, 978-0324584837
