A monopolist’s inverse demand function is P = 150 − 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at factory 2 is MC2 (Q2) = 2Q2. a. Provide the equation for the monopolist’s marginal revenue function. (Hint: Recall that Q1 + Q2 = Q.) b. Determine the profit-maximizing level of output for each facility. c. Determine the profit-maximizing price.
A monopolist’s inverse demand function is P = 150 − 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at factory 2 is MC2 (Q2) = 2Q2. a. Provide the equation for the monopolist’s marginal revenue function. (Hint: Recall that Q1 + Q2 = Q.) b. Determine the profit-maximizing level of output for each facility. c. Determine the profit-maximizing price.
Chapter8: Monopoly
Section: Chapter Questions
Problem 4SQ
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A monopolist’s inverse demand function is P = 150 − 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at factory 2 is MC2 (Q2) = 2Q2.
a. Provide the equation for the monopolist’s marginal revenue function. (Hint: Recall that Q1 + Q2 = Q.)
b. Determine the profit-maximizing level of output for each facility.
c. Determine the profit-maximizing
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