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A monopolistic producer of two goods, G1 and G2, has a joint total cost function TC =10Q1 +Q1Q2 +10Q2 where Q1 and Q2 denote the

A monopolistic producer of two goods, G1 and G2, has a joint total cost function

TC =10Q1 +Q1Q2 +10Q2

where Q1 and Q2 denote the quantities of G1 and G2 respectively. If Q1 and Q1 denote the corresponding prices then the demand equations are

P1 =50 +Q1 +Q2

P2= 30 +2Q1 +Q2

Find the maximum profit if the firm is contracted to produce a total of 15 goods of either type. Estimate the new optimal profit if the production quota rises by 1 unit.

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