A monopolist’s inverse demand function is estimated as P = 450 − 3Q. The company produces output at two facilities; the marginal cost of producing at Facility 1 is M C1(Q1) = 2Q1, and the marginal cost of producing at Facility 2 is M C2(Q2) = 6Q2. (a) Provide the equation for the monopolist’s marginal revenue function. (b) Determine the profit maximizing level of output for each facility. (c) Determine the profit maximizing price.

A monopolist’s inverse demand function is estimated as P = 450 − 3Q. The company produces output at two facilities; the marginal cost of producing at Facility 1 is M C1(Q1) = 2Q1, and the marginal cost of producing at Facility 2 is M C2(Q2) = 6Q2. (a) Provide the equation for the monopolist’s marginal revenue function. (b) Determine the profit maximizing level of output for each facility. (c) Determine the profit maximizing price.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Monopoly

Section: Chapter Questions

Problem 4SQ

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