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4. The inverse market demand is P=100 - 2/3Q. The firms have cost functions TC1 = 15 + 3q1+ q1? TC2 = 20 + q2 + 2q2? %3D Q = q1 +q2 a. Assume there is a multiplant monopoly. Would it make sense for the firm to close one of the plants? If the TC of production is less than the cost production in one of the plants. They it should stop one of the plant. b. Does your answer change if TC2 = 20 + q2 + 2q2° changes to TC2 = 1000 + q2 + 2q? ? No. c. Explain your answer from the prior question- did your production change or remain the same?

4. The inverse market demand is P=100 - 2/3Q. The firms have cost functions TC1 = 15 + 3q1+ q1? TC2 = 20 + q2 + 2q2? %3D Q = q1 +q2 a. Assume there is a multiplant monopoly. Would it make sense for the firm to close one of the plants? If the TC of production is less than the cost production in one of the plants. They it should stop one of the plant. b. Does your answer change if TC2 = 20 + q2 + 2q2° changes to TC2 = 1000 + q2 + 2q? ? No. c. Explain your answer from the prior question- did your production change or remain the same?

Principles of Economics 2e
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 32P: Draw the demand curve, marginal revenue, and marginal cost curves from Figure 9.6, and identify the...
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4. The inverse market demand is P=100 – 2/3Q. The firms have cost functions TC1 = 15 + 3q1+ q1? TC2 = 20 + q2 + 2q2? Q = q1 +92 a. Assume there is a multiplant monopoly. Would it make sense for the firm to close one of the plants? If the TC of production is less than the cost production in one of the plants. They it should stop one of the plant. b. Does your answer change if TC2 = 20 + q2 + 292? changes to TC2 = 1000 + q2 + 2q? ? No. c. Explain your answer from the prior question- did your production change or remain the same? d. Graph your results from the prior questions on one graph. Label all points.
Transcribed Image Text:4. The inverse market demand is P=100 – 2/3Q. The firms have cost functions TC1 = 15 + 3q1+ q1? TC2 = 20 + q2 + 2q2? Q = q1 +92 a. Assume there is a multiplant monopoly. Would it make sense for the firm to close one of the plants? If the TC of production is less than the cost production in one of the plants. They it should stop one of the plant. b. Does your answer change if TC2 = 20 + q2 + 292? changes to TC2 = 1000 + q2 + 2q? ? No. c. Explain your answer from the prior question- did your production change or remain the same? d. Graph your results from the prior questions on one graph. Label all points.
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