A firm produces two products (A and B) jointly. Every time a unit of A is produced, a unit of B is also produced as a byproduct. The demand functions for A and B are: QA = 3000 - 20PA QB = 1000 - 10PB Assuming that disposal is costless, determine the number of units of A and B that the firm should produce, the number of units of A and B that the firm should sell, and the price that should be charged for each of the products if the firm's marginal cost of producing a unit of joint output is: (i) MC = 70 + 0.30Q (ii) MC = 10 + 0.04Q

A firm produces two products (A and B) jointly. Every time a unit of A is produced, a unit of B is also produced as a byproduct. The demand functions for A and B are: QA = 3000 - 20PA QB = 1000 - 10PB Assuming that disposal is costless, determine the number of units of A and B that the firm should produce, the number of units of A and B that the firm should sell, and the price that should be charged for each of the products if the firm's marginal cost of producing a unit of joint output is: (i) MC = 70 + 0.30Q (ii) MC = 10 + 0.04Q

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter16: Public Goods And Public Choice

Section: Chapter Questions

Problem 1.1P: (Optimal Provision of Public Goods) Using at least two individual consumers, show how the market...

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