4. Suppose that a firm has two plants with the following cost functions: MC1 = 5+2q1...
4. Suppose that a firm has two plants with the following cost functions:
MC1 = 5+2q1
MC2 = 40+q2
Fixed costs are 40 for each plant.
a. Suppose price is 60. How much should this firm produce in each plant?
b. Suppose the firm wishes to produce 25 units. How much should it produce in each plant?
c. Repeat b. under the assumption that the firm wishes to produce 15 units. Check your answer carefully.
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4. Suppose that a firm has two plants with the following cost
functions:
MC1 = 5+2q1...
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Please help me understand how
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Please answer me in detail. Thank you.
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A drug company has a monopoly on a new patented medicine. The product can be made in either of two plants. The marginal costs of production for the two plants are MC 4 = 20 +2Q1 and MC2 = 10 + 4Q2 The firm's estimate of demand for the product is P=20-3(Q4+Q2) How much should the firm plan to produce in each plant? At what price should it plan to sell the product? (Round your responses to two decimal places.)...
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Please show all workings. Thank you.
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