Suppose the inverse demand for a monopolist's product is given by PQ) = 70 – 50 The monopolist can produce output in two plants. The marginal cost of producing in plant 1 is MC, = 3Q1, and the marginal cost of producing in plant 2 is MC, = Q,. How much out- put should be produced in each plant to maximize profits, and what price should be charged for the product?
Suppose the inverse demand for a monopolist's product is given by PQ) = 70 – 50 The monopolist can produce output in two plants. The marginal cost of producing in plant 1 is MC, = 3Q1, and the marginal cost of producing in plant 2 is MC, = Q,. How much out- put should be produced in each plant to maximize profits, and what price should be charged for the product?
Chapter10: Monopoly
Section: Chapter Questions
Problem 3QP
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