Cost of Production Questions. It is asking for the the following:

C(Q_1, Q_2 )=100+Q_1 , Q_2 +Q_1 + Q_2

Your firm produces two products, and . An economic consulting firm has estimated your cost function to be

a.Are there economies of scope?

b.Are there cost complementarities?

c.Your market for is not very good for Q_1, and an overseas firm has offered to buy the division of your company that produces . What will happen to your marginal cost of Q_2 producingif you sell the division?

d.You currently produce 2 units of Q_1and 100 units of Q_2 . If you sell the division that produces Q_1, what will happen to your average cost of producing Q_2if you continue to produce 100 units ofQ_2?