The monopolist's demand curve is given by the following equation: P = 100 0.5Q where Q = q₁ + 92, 91 is the output produced in factory 1 and q₂ is the output produced in factory 2. The cost equations of the two plants are: C₁ = 20q₁ and C₂ = 0.25q22. The goal of the monopolist is to maximise profit. How much should the monopolist produce in factory 1 and how much in factory 2? O 91 = 70; 92 = 20 O 91 = 50; 92 = 10 O 91 = 40; q2 = 40 111 91 = 20; 92 = 60
The monopolist's demand curve is given by the following equation: P = 100 0.5Q where Q = q₁ + 92, 91 is the output produced in factory 1 and q₂ is the output produced in factory 2. The cost equations of the two plants are: C₁ = 20q₁ and C₂ = 0.25q22. The goal of the monopolist is to maximise profit. How much should the monopolist produce in factory 1 and how much in factory 2? O 91 = 70; 92 = 20 O 91 = 50; 92 = 10 O 91 = 40; q2 = 40 111 91 = 20; 92 = 60
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The monopolist's demand curve is given by the following equation: P = 100
0.5Q where Q = q₁ + 92, 91 is the output produced in factory 1 and q₂ is
the output produced in factory 2. The cost equations of the two plants are:
C₁ = 20q₁ and C₂ = 0.25q22. The goal of the monopolist is to maximise
profit. How much should the monopolist produce in factory 1 and how much
in factory 2?
O 91 = 70; 92 = 20
O 91 = 50; 92 = 10
O 91 = 40; q2 = 40
111
91 = 20; 92 = 60
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