A firm produces two products, "f" and "g", and the production process is such that one unit of f is always obtained with one unit of "g". If the demand curves for "f" and "g" are estimated to be:
Qf = 300 - Pf so that MRf = 300 - 2Qf)
Qg = 400 - 2Pg so that MRg = 200 - Qg)
and the marginal cost of production is MC = 50 + 3Qj, where Qj consists of one unit of each product, how much of product "f" and product "g" should the firm sell to maximize profit?
Correct Answer:
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MRj = MC
...
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