A monopolistic producer of two goods, G1 and G2, has a joint total cost function TC = 5Q1 + Q1Q2 + 5Q2 Where Q1 and Q2 denote the quantities of G1 and G2 respectivel. If P1 and P2 denote the corresponding prices then the demand equations are P1 = 40 − Q1 + Q2 P2 = 20 + 2Q1 − Q2 a) Find the total revenue function for each good b) Find the profit function for the firm c) Find the maximum profit if the firm is contracted to produce a total of 12 goods of either type d) Find the price that the firm is supposed to charge for each good. e) Estimate the new optimal profit if the production quota increases by 2 units
A monopolistic producer of two goods, G1 and G2, has a joint total cost function TC = 5Q1 + Q1Q2 + 5Q2 Where Q1 and Q2 denote the quantities of G1 and G2 respectivel. If P1 and P2 denote the corresponding prices then the demand equations are P1 = 40 − Q1 + Q2 P2 = 20 + 2Q1 − Q2 a) Find the total revenue function for each good b) Find the profit function for the firm c) Find the maximum profit if the firm is contracted to produce a total of 12 goods of either type d) Find the price that the firm is supposed to charge for each good. e) Estimate the new optimal profit if the production quota increases by 2 units
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 10
A monopolistic producer of two goods, G1 and G2, has a joint total cost function TC = 5Q1 + Q1Q2 + 5Q2
Where Q1 and Q2 denote the quantities of G1 and G2 respectivel. If P1 and P2 denote the
corresponding prices then the demand equations are
P1 = 40 − Q1 + Q2
P2 = 20 + 2Q1 − Q2
a) Find the total revenue function for each good
b) Find the profit function for the firm
c) Find the maximum profit if the firm is contracted to produce a total of 12 goods of either
type
d) Find the
e) Estimate the new optimal profit if the production quota increases by 2 units
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