A monopolist produces a homogeneous good in two factories, each with its own distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2 are given by MC1 = 4*Q1 and MC2 = 2*Q2 +2 respectively. - where 1 and 2 represent the quantity of goods produced by Factory 1 and Factory 2. The monopolist faces a market demand represented by Q = 64 P where is the total quantity demanded, and Pis the price of the good. The profit-maximizing output levels for each factory of the monopolist are: - OQ1 = 11 and Q2 = 21 OQ1 = 61 and Q2 OQI = Q₁ = = 194 12 and Q2 25 194 12 23 and Q2 33 = = 308 25 308 23
A monopolist produces a homogeneous good in two factories, each with its own distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2 are given by MC1 = 4*Q1 and MC2 = 2*Q2 +2 respectively. - where 1 and 2 represent the quantity of goods produced by Factory 1 and Factory 2. The monopolist faces a market demand represented by Q = 64 P where is the total quantity demanded, and Pis the price of the good. The profit-maximizing output levels for each factory of the monopolist are: - OQ1 = 11 and Q2 = 21 OQ1 = 61 and Q2 OQI = Q₁ = = 194 12 and Q2 25 194 12 23 and Q2 33 = = 308 25 308 23
Chapter8: Monopoly
Section: Chapter Questions
Problem 15SQ
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Transcribed Image Text:A monopolist produces a homogeneous good in two factories, each with its own
distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2
1 and MC2 2*Q2 +2 respectively.
are given by MC₁ = 4*Q1
where 1 and 2 represent the quantity of goods produced by Factory 1 and
Factory 2. The monopolist faces a market demand represented by
Q = 64
64-P where is the total quantity demanded, and Pis the price of
the good. The profit-maximizing output levels for each factory of the monopolist
are:
OQ1 = 11 and Q2 21
OQ1 = 61 and Q2
= 33
Q₁ =
194
25
OQ₁ 194
23
=
and Q2₂
and Q2
1
-
308
25
308
23
=
Paten
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