2. A fim is a monopolistic producer of two goods G, and G2. The prices are related to quantities Q1 and Qz according to the demand equations Q1 = 50 – P, 202 = 90 – P2 If the total cost function is TC = Q + 2Q,Q2 + Q? a) Find an expression for the firm's profit b) Find the values of Q1 and Q2 which maximises profit by applying first and second order conditions and then the corresponding prices. c) Find the maximum profit and deduce the prices that maximises profit

2. A fim is a monopolistic producer of two goods G, and G2. The prices are related to quantities Q1 and Qz according to the demand equations Q1 = 50 – P, 202 = 90 – P2 If the total cost function is TC = Q + 2Q,Q2 + Q? a) Find an expression for the firm's profit b) Find the values of Q1 and Q2 which maximises profit by applying first and second order conditions and then the corresponding prices. c) Find the maximum profit and deduce the prices that maximises profit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please Answer all subparts with explanation.

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2. A firm is a monopolistic producer of two goods G, and G2. The prices are related to
quantities Q, and Q2 according to the demand equations
Q1 = 50 – P,
202 = 90 – P2
If the total cost function is
TC = Q +2Q,Q2 + Q
a) Find an expression for the firm's profit
b) Find the values of Q1 and Q2 which maximises profit by applying first and
second order conditions and then the corresponding prices.
c) Find the maximum profit and deduce the prices that maximises profit

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