Microeconomic Theory
12th Edition
ISBN: 9781337517942
Author: NICHOLSON
Publisher: Cengage
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Question
Chapter 2, Problem 2.2P
(a)
To determine
To compute: The level of output to maximize profit and calculating profit, thereof.
(b)
To determine
To show: The second-order condition is satisfied in (a).
(c)
To determine
To discuss: If ‘marginal revenue is equal to marginal cost’ rule is followed in the calculation.
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A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x and MC2 = 6+0.1y, where output in production process 1 is x, output in production process 2 is y and hence total output produced is Q = x+y. Show your work to answer the following questions.
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Chapter 2 Solutions
Microeconomic Theory
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