Refer to the following:
A firm sells two goods (X and Y) that are related in consumption. The estimated demand and cost conditions are:
$$\begin{array} { l }
P _ { X } = 20 - 0.1 Q _ { X } - 0.05 Q _ { y } \
P _ { y } = 70 - 0.3 Q _ { y } - 0.1 Q _ { X } \
M C _ { X } = 1 + 0.1 Q _ { X } \
M C _ { y } = 2 + 0.25 Q _ { y }
\end{array}$$
-What are the profit-maximizing prices for the two goods?
A) $P _ { X }$ = $25.60,$P _ { y }$ = $20.50
B) $P _ { X }$ = $30,$P _ { y }$ = $35
C) $P _ { X }$ = $50,$P _ { y }$ = $45
D) $P _ { X }$ = $11.20,$P _ { y }$ = $42.70

Question

Refer to the following:
A firm sells two goods (X and Y) that are related in consumption. The estimated demand and cost conditions are:
 $$\begin{array} { l } 
P _ { X } = 20 - 0.1 Q _ { X } - 0.05 Q _ { y } \
P _ { y } = 70 - 0.3 Q _ { y } - 0.1 Q _ { X } \
M C _ { X } = 1 + 0.1 Q _ { X } \
M C _ { y } = 2 + 0.25 Q _ { y }
\end{array}$$
-What are the profit-maximizing prices for the two goods?
A) $P _ { X }$ = $25.60,$P _ { y }$ = $20.50
B) $P _ { X }$ = $30,$P _ { y }$ = $35
C) $P _ { X }$ = $50,$P _ { y }$ = $45
D) $P _ { X }$ = $11.20,$P _ { y }$ = $42.70

Quizplus · Accepted Answer

The profit-maximizing prices are determined by setting marginal revenue equal to marginal cost for each good and solving the system of equations. The given demand and cost functions lead to the solution where $P _ { X }$ = $11.20 and $P _ { y }$ = $42.70.

Refer to the Following: a Firm Sells Two Goods (X

Refer to the Following:
a Firm Sells Two Goods (X