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As a consultant in the horticultural industry, you have been asked to advise a cooperative of local producers of a specific orchid hybrid, who sell
As a consultant in the horticultural industry, you have been asked to advise a cooperative of local producers of a specific orchid hybrid, who sell their products to two types of customers: households with demand q_1=100-3p_1, and firms, with demand q_2=100-1/2 p_2. The cooperative operates as a monopolist in the region, and its cost function is C=1 300 +4q, where q=q_1+q_2 denotes aggregate output. There is no possibility of arbitrage between the two groups. Find the optimal output levels and prices for each group of customers.
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