Question

1. (10) Company XYZ has a monopoly on a new product. The product can be manufactured in either of two factories. The costs of production for the two factories are MC1 = 10 + Qi and MC2 = 3 + 3Q2. The firm's demand for the product is P= 10 – 2(Q1 + Q2). How much should the firm produce in each factory? At what price should it sell the product?

Answer 1

Hero; p = 10- 20 - 202 For firmi Mc, = d (TC) do = d (1000) di Mc 2 TR,= (10-20,-202) a loo, - 20, 2- 20₂0, = MR = (TR) del I lo 40,- 202 FOR Profit Maximization METAR 10-40- 202 4Qt20₂ = 9 → b for from 2 TR2= = lo la 2002 - 20₂2 MR₂ 10 - 40920,- 422 d (T(2) Mecz 2 do. 3

Now; MC2 = MR2 lo-402-20 = 3 120, 140, 7. Sohling and Cug for and 02 elimination method . ☺ Now egration in by 4Q + 202 = 9 20+ 4Q2 = 7 12. 4 X 80+ 40₂ = 18 8 do t 1602 = 28 1202 = 10 Q=0.84 Now "Q + 2 x 0.84=9 YQ1 = 7.32 Q1 = 1.84 Now P = 10-2 (0, 702) = 10-2 (1.84 184) - lo- 5.36 P $4.64 price z