ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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4. A monopolist produces exactly the same product at three plants with respective costs
C = Q1 + Qỉ C2 = 3Q2 C3 = 3Q3 – Q3
Ci
If the price for the product is P; = 40 – Qi
Rị = P;Qi i = 1,2,3 → TR = E{ R{
Find the critical value (Qj, Q2, Q3) of the firm's profit ( = TR – TC) and use the Hessian to
determine if it is a relative minimum or maximum.
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Transcribed Image Text:4. A monopolist produces exactly the same product at three plants with respective costs C = Q1 + Qỉ C2 = 3Q2 C3 = 3Q3 – Q3 Ci If the price for the product is P; = 40 – Qi Rị = P;Qi i = 1,2,3 → TR = E{ R{ Find the critical value (Qj, Q2, Q3) of the firm's profit ( = TR – TC) and use the Hessian to determine if it is a relative minimum or maximum.
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