A company operates two plants which manufacture the same item and whose total cost functions are C₁ = 5.8 +0.03(91)² and C₂ = 7.3 +0.04(92)², where qi and 92 are the quantities produced by each plant. The company is a monopoly. The total quantity demanded, q = 91 +92, is related to the price, p, by p=400.04q. How much should each plant produce in order to maximize the company's profit?¹

A company operates two plants which manufacture the same item and whose total cost functions are C₁ = 5.8 +0.03(91)² and C₂ = 7.3 +0.04(92)², where qi and 92 are the quantities produced by each plant. The company is a monopoly. The total quantity demanded, q = 91 +92, is related to the price, p, by p=400.04q. How much should each plant produce in order to maximize the company's profit?¹

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 10E

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A company operates two plants which manufacture the same item and whose total cost functions are C₁ = 5.5 +0.01(9₁)² and C₂ M 8.2 +0.08(92)². where q, and q2 are the quantities produced by each plant. The company is a monopoly. The total quantity demanded, q = 91 +92. is related to the price, p, by p= 40 -0.08q. How much should each plant produce in order to maximize the company's profit?¹ 91 = 92 = i MA
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