2) Consider the cost functions of a two firmsthat are producing the same commodity areC1 = 3q1^2 + 50q1C2 = 2q2^2 + 20q2 - 4q1q2Determine the output levels of the firmson the assumption that each equates itprivate marginal cost to a fixed marketprice of 200.-Determine the output levels on theassumption that each equates its socialmarginal cost to the market price.

Cost of firm 1 : C1 = 3q12 + 50 q1 Cost of firm 2 : C2 = 2q22 + 20q2 - 4q1q2 Social marginal cost…

Answered: 2) Consider the cost functions of a two…

2) Consider the cost functions of a two firms that are producing the same commodity are C1 = 3q1^2 + 50q1 C2 = 2q2^2 + 20q2 - 4q1q2 Determine the output levels of the firms

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2) Consider the cost functions of a two firms
that are producing the same commodity are
C1 = 3q1^2 + 50q1
C2 = 2q2^2 + 20q2 - 4q1q2
Determine the output levels of the firms
on the assumption that each equates it
private marginal cost to a fixed market
price of 200.
-
Determine the output levels on the
assumption that each equates its social
marginal cost to the market price.

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