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A Firm Produces Two Products, X and Y, and the Production

Question 27

Multiple Choice

A firm produces two products, x and y, and the production process is such that one unit of x is always obtained with one unit of y. If the demand for x and y are estimated to be:
Qx = 100 - Px so that MRx = 100 - 2Qx)
Qy = 220 - Py so that MRy = 220 - 2Qy)
And the marginal cost of production is MC = 50 + .5Qj, where Qj consists of one unit of each product, how much of product x should the firm sell in order to maximize profit?


A) 30
B) 40
C) 50
D) 60
E) 70

Correct Answer:

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