A firm operates two plants whose marginal cost schedules areMC1 = 22.5 + 0.25q1MC2 = 15 +0.25q2It is also a monopoly which can price-discriminate between two markets, A andB, whose demand schedules arePA = 600 – 0.125qAрв 3D 850 — 0.1qвIf it wishes to maximize profits, how much should it produce in each plant, howmuch should it sell in each market, and what prices should it sell at?

Given: Marginal costs for two plants: MC1 = 22.5+0.25q1MC2 = 15+0.25q2 The demand schedule for two…

A firm operates two plants whose marginal cost schedules are MC1 = 22.5 +0.25q1 MC2 = 15+0.25q2 It is also a monopoly which can price-discriminate between two markets, A and B, whose demand schedules are РА 3 600 — 0.125qA рв 3D 850 — 0.1qв If it wishes to maximize profits, how much should it produce in each plant, how much should it sell in each market, and what prices should it sell at?

A firm operates two plants whose marginal cost schedules are MC1 = 22.5 +0.25q1 MC2 = 15+0.25q2 It is also a monopoly which can price-discriminate between two markets, A and B, whose demand schedules are РА 3 600 — 0.125qA рв 3D 850 — 0.1qв If it wishes to maximize profits, how much should it produce in each plant, how much should it sell in each market, and what prices should it sell at?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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