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A firm sells two goods ( X and Y ) that are related in consumption. The estimated demand and cost conditions are: P X =
A firm sells two goods ( X andY) that are related in consumption. The estimated demand and cost conditions are: PX = 20 0.1 QX 0.05 QY PY =70 0.3 QY0.1 QX MCX = 1 + 0.1 QX MCY = 2 + 0.25 QY What are the profit-maximizing levels of output for the two goods?
A) QX = 20, QY = 10 B) QX = 41, QY = 24 C) independent. D) QX = 51, QY = 74 E) None of the choices are correct
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