PROBLEM (6) A monopolist faces a market demand Q = 180 – 2p and has two plants 1 and 2, producing identical products with total cost functions TC:(q) = q² and TC2(q) = 1/3 q² (hence MC1(q) = 2q and MC2(q) = 2q/3), respectively. (a) Derive the monopolistť's multiplant marginal cost function. (b) What is the optimal quantity produced at each of the plants, and what is the optimal price? (c) Calculate the net profits for the monopoly and the DWL. %3D %3D %3D
PROBLEM (6) A monopolist faces a market demand Q = 180 – 2p and has two plants 1 and 2, producing identical products with total cost functions TC:(q) = q² and TC2(q) = 1/3 q² (hence MC1(q) = 2q and MC2(q) = 2q/3), respectively. (a) Derive the monopolistť's multiplant marginal cost function. (b) What is the optimal quantity produced at each of the plants, and what is the optimal price? (c) Calculate the net profits for the monopoly and the DWL. %3D %3D %3D
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Antitrust And Regulation
Section: Chapter Questions
Problem 10SQP
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