In your managerial role overseeing production at Mountian Makers Beans, your main product is a line of baked beans in a market with demand Qb = 12,000 -40 Pb, where Qb is the number of cans of beans sold and Pb is the price of beans per can. Mountain Makers Beans faces production costs of TC = 4500 + 100Qb. However, production involves a useful waste product: the shells from each bean can be sold to other companies to produce cat litter at no cost to Mountain Makers Beans. Demand for these bean shells is given by: Qs = 6500-1000Ps, where Qs refers to the pounds of pellets sold at a price, Ps, to the other companies. Notably, the production of each can of beans produces precisely one pound of shells.

1. Do economies of scope exist for beans and shells?

2. What is the optimal number of cans of beans that Mountain Makers Beans should produce and sell?

3. What is the optimal number of pounds of shells Mountain Makers Beans should sell to cat litter producers? At what price should the shells be sold?