A monopolist's inverse demand function is estimated as P= 150 – 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC(Q) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) =2Q2. a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recall that Q + Q2 = Q.) MR(Q) = Q2 b. Determine the profit-maximizing level of output for each facility. Output for facility 1: Output for facility 2:| c. Determine the profit-maximizing price.
A monopolist's inverse demand function is estimated as P= 150 – 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC(Q) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) =2Q2. a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recall that Q + Q2 = Q.) MR(Q) = Q2 b. Determine the profit-maximizing level of output for each facility. Output for facility 1: Output for facility 2:| c. Determine the profit-maximizing price.
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.5P
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