A monopolist produces a homogeneous good in two factories, each with its own distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2 are given by MC1 = 4*Q1 and MC2 = 2*Q2 + 2 respectively, where 1 and 2 represent the quantity of goods produced by Factory 1 and Factory 2. The monopolist faces a market demand represented by Q = 64P,where is the total quantity demanded, and P is the price of the good. The profit-maximizing output levels for each factory of the monopolist are: 308 25 OQ1 = 61 and Q2 = 33 OQ1 Q₁ O Q1 = = = 124 and Q2 = 25 194 and Q2 23 = 308 23 11 and Q2 = 21
A monopolist produces a homogeneous good in two factories, each with its own distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2 are given by MC1 = 4*Q1 and MC2 = 2*Q2 + 2 respectively, where 1 and 2 represent the quantity of goods produced by Factory 1 and Factory 2. The monopolist faces a market demand represented by Q = 64P,where is the total quantity demanded, and P is the price of the good. The profit-maximizing output levels for each factory of the monopolist are: 308 25 OQ1 = 61 and Q2 = 33 OQ1 Q₁ O Q1 = = = 124 and Q2 = 25 194 and Q2 23 = 308 23 11 and Q2 = 21
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A monopolist produces a homogeneous good in two factories, each with its own
distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2
are given by MC₁
4*Q1 and MC2 = 2*Q2 +2 respectively,
where 1 and 2 represent the quantity of goods produced by Factory 1 and
Factory 2. The monopolist faces a market demand represented by
Q 64 P,where is the total quantity demanded, and P is the price of
the good. The profit-maximizing output levels for each factory of the monopolist
are:
=
194
25
OQ1 = 61 and Q2 = 33
194 and Q2
23
Q1
=
OQ1 =
=
=
=
and Q2
OQ1 11 and Q2
=
-
=
308
25
308
23
21](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75bce727-3334-4276-a01b-3702e95ac3c8%2Fadb71caf-80c5-48a0-b3fd-f940495a6a57%2F5g1hgze_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A monopolist produces a homogeneous good in two factories, each with its own
distinct marginal cost (MC) function. The marginal costs for Factory 1 and Factory 2
are given by MC₁
4*Q1 and MC2 = 2*Q2 +2 respectively,
where 1 and 2 represent the quantity of goods produced by Factory 1 and
Factory 2. The monopolist faces a market demand represented by
Q 64 P,where is the total quantity demanded, and P is the price of
the good. The profit-maximizing output levels for each factory of the monopolist
are:
=
194
25
OQ1 = 61 and Q2 = 33
194 and Q2
23
Q1
=
OQ1 =
=
=
=
and Q2
OQ1 11 and Q2
=
-
=
308
25
308
23
21
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