1.Suppose a monopoly is producing its output in two different plants. The total cost function of each plant is given below.

TC₁= 1.5andTC₂= 0.5

Where subscript 1 stands for plant 1 and subscript 2 denotes plant 2.

The inverse demand curve that the monopolist faces is as follows:

P = 70 - 0.5Q

Where Q stands for the total market quantity: Q = Q₁+ Q₂.

1 Determine the profit maximizing levels of output Q₁and Q₂and price.

Answer:

2 Calculate the price.

Answer:

3 Calculate the total profit.