A company operates two plants which manufacture the same item and whose total cost functions are C₁ = 5.8 +0.03(91)² and C₂ = 7.3 +0.04(92)², where qi and 92 are the quantities produced by each plant. The company is a monopoly. The total quantity demanded, q = 91 +92, is related to the price, p, by p=400.04q. How much should each plant produce in order to maximize the company's profit?¹

A company operates two plants which manufacture the same item and whose total cost functions are C₁ = 5.8 +0.03(91)² and C₂ = 7.3 +0.04(92)², where qi and 92 are the quantities produced by each plant. The company is a monopoly. The total quantity demanded, q = 91 +92, is related to the price, p, by p=400.04q. How much should each plant produce in order to maximize the company's profit?¹

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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