Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A monopolist's inverse demand function is P = 150 - 3 Q . The company produces output at two facilities; the marginal cost of producing
A monopolist's inverse demand function is P = 150 - 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2.
a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recall that Q1 + Q2 = Q.)
MR(Q) = - Q1 - Q2
b. Determine the profit-maximizing level of output for each facility.
Output for facility 1:
Output for facility 2:
c. Determine the profit-maximizing price.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started