Question
A firm produces two products (A and B) jointly. Every time a unit of A is produced, a unit of B is also produced as
A firm produces two products (A and B) jointly. Every time a unit of A is produced, a unit of B is also produced as a byproduct. The demand functions for A and B are:
Qa = 300 - 2Pa
Qb = 100 - Pb
The marginal cost of producing a joint output is:
MC = 50 + Q
Assuming that disposal is costless, what is the number of units of joint output that should be produced (1) ................. ?
The firm should sell (2) ......................... units of product A and charge a price of (3) $......................
The firm should also sell (4) ..................units of product B and charge a price of (5) $.......................
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