A monopolist’s inverse demand function is estimated as P = 450 − 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 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 Q1 + Q2 = Q.) MR(Q) = − Q1 − Q2 b. Determine the profit-maximizing level of output for each facility. Instructions: Round your response to two decimal places.Output for facility 1:Output for facility 2:c. Determine the profit-maximizing price. Instructions: Round your response to the nearest penny (two decimal places). $

P = 450 − 3QMC1(Q1) = 6Q1MC2(Q2) = 2Q2.

Answered: A monopolist’s inverse demand function…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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A monopolist’s inverse demand function is estimated as P = 450 − 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC₁(Q₁) = 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 Q₁ + Q₂ = Q.)

MR(Q) = − Q₁ − Q₂

b. Determine the profit-maximizing level of output for each facility.

Instructions: Round your response to two decimal places.

Output for facility 1:

Output for facility 2:

c. Determine the profit-maximizing price.

Instructions: Round your response to the nearest penny (two decimal places).

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