Suppose that a monopoly firm supplies to two different markets with the demand functions: Market 1: q, = 100 – 2p1 +P2 (1.1) Market 2: q2 = 150 + p1 – 3p2 (1.2) ( Assume that the firm's cost function is (q1 + 92)². a. Suppose there is a restriction of q2 < 20 in the market for good 2. What is the profit maximising price and output? Now suppose the firm has a resource constraint such that it can produce a maximum of 40 units of both goods in total, i.e., q, + q2 5 40. b. What is the impact on the firm's output in both markets, as well as on the maximum profit?

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