4. A decorator, who is a monopolist, makes two types of specialty picture frames. From experience, the decorator has determined that if x frames of the first type and y frames of the second type are made and put on sale in a showroom, they can be sold for (100– 2x) dollars and (120- 3y) dollars each, respectively. The total cost of constructing these frames is (12x + 12y +4xy) dollars. How many frames of each type should be produced to realize the maximum profit, and what is the maximum profit? Make sure to verify that this is indeed a maximum. 4

4. A decorator, who is a monopolist, makes two types of specialty picture frames. From experience, the decorator has determined that if x frames of the first type and y frames of the second type are made and put on sale in a showroom, they can be sold for (100– 2x) dollars and (120- 3y) dollars each, respectively. The total cost of constructing these frames is (12x + 12y +4xy) dollars. How many frames of each type should be produced to realize the maximum profit, and what is the maximum profit? Make sure to verify that this is indeed a maximum. 4

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...

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