2) (4 p.) Market demand is P(Q) = 40 - Q. A multi-plant monopolist operates two plants, with average cost functions...

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Question

Answer 1

Answer #1

mosket demand firm (plouth p=40-Q, TR1 = P.Q, MR = TR = 40(1) -20, AC = 8 TC = 8. Q MC = DTC = 8(1) MC, =8 profit - maximizin

MR, = MC, yo-20. = 8 QQ, - 70-8 2, 32 Q = 16 units. substituting luto Price equation. P =40-16 P =24 Plant 2 MPI = MR₂ = 40-2

40-1 - 0.5022 +22₂ 39 = 2.5Q2 2.5 Q2 = 15.6 Substituting into p=40-22 P = no 15.6 P = 24.4 units. equation is achieved Since

Answer 2

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