4. A decorator, who is a monopolist, makes two types of specialty picture frames. From experience, the decorator has determined that if x frames of the first type and y frames of the second type are made and put on sale in a showroom, they can be sold for (100– 2x) dollars and (120- 3y) dollars each, respectively. The total cost of constructing these frames is (12x + 12y +4xy) dollars. How many frames of each type should be produced to realize the maximum profit, and what is the maximum profit? Make sure to verify that this is indeed a maximum. 4

4. A decorator, who is a monopolist, makes two types of specialty picture frames. From experience, the decorator has determined that if x frames of the first type and y frames of the second type are made and put on sale in a showroom, they can be sold for (100– 2x) dollars and (120- 3y) dollars each, respectively. The total cost of constructing these frames is (12x + 12y +4xy) dollars. How many frames of each type should be produced to realize the maximum profit, and what is the maximum profit? Make sure to verify that this is indeed a maximum. 4

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter13: Between Competition And Monopoly

Section: Chapter Questions

Problem 5DQ

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