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Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022 Exercise 17
Suppose a company has a monopoly on a game called Monopoly and faces a demand curve given by
QT = 100 - P
and a marginal revenue function given by
MR = 100 - 2QT
where QT equals the combined total number of games produced per hour in the company's two factories (QT - q1 + q2). If factory 1 has a marginal cost function given by
MC1 - q1 - 5
and factory 2 has a marginal cost function given by
MC2 - 0.5q2- 5
how much total output will the company choose to produce and how will it distribute this production between its two factories in order to maximize profits?
QT = 100 - P
and a marginal revenue function given by
MR = 100 - 2QT
where QT equals the combined total number of games produced per hour in the company's two factories (QT - q1 + q2). If factory 1 has a marginal cost function given by
MC1 - q1 - 5
and factory 2 has a marginal cost function given by
MC2 - 0.5q2- 5
how much total output will the company choose to produce and how will it distribute this production between its two factories in order to maximize profits?
Explanation
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A multiplant monopolist will still produ...
Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
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