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

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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
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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