Question

PROBLEM: FIRM WITH TWO PLANTS, A and B The firm’s Inverse Demand is P=50-Q , where...

PROBLEM: FIRM WITH TWO PLANTS, A and B The firm’s Inverse Demand is P=50-Q , where Q=QA+QB The AVC at Plant A is AVCA =20+QA The AVC at Plant B is AVCB=10+2QB

Find the Profit maximizing value of Q

Find the Profit maximizing allocation of Q to Plants A and B

Find the Price associated with the Profit-maximizing value of Q

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Manager of firm that produces output in two plants. The demand for your firm’s product is...
Manager of firm that produces output in two plants. The demand for your firm’s product is P = 80 – Q, where Q = Q1 + Q2. The marginal cost associated with producing in the two plants are MC1 = Q1 and MC2 = 8. What is the profit maximizing price that the firm should charge?
Multiplant monopoly problem: Assume the firm has two plants with the following marginal cost functions: MC1...
Multiplant monopoly problem: Assume the firm has two plants with the following marginal cost functions: MC1 = 20 + 2Q1 MC2 = 10 + 5Q2 Assume that the inverse demand curve is P = 500-Q. What is the profit maximizing outputs produced in each plant? Show your work. What is the profit maximizing price? Show your work. What is the maximum profit?
Two firms, A and B, are Cournot competitors facing the inverse market demand P = 5...
Two firms, A and B, are Cournot competitors facing the inverse market demand P = 5 - 0.001Q, where Q = qA + qB. Each firm has the same total cost function Ci = 2qi , i = A, B. a. (8) Write out the profit function of firm A, then derive the best response functions for A and B. (You only need to derive one best response function because A and B are identical.) Carefully graph the best response...
Suppose the (inverse) demand function facing a firm is p(q)=10 – q, where p is the...
Suppose the (inverse) demand function facing a firm is p(q)=10 – q, where p is the price, q is quantity. 1. Draw the (inverse) demand function and marginal revenue. Show your detailed work such as slope, intercept. 2. Suppose the firm has a marginal cost MC=q, and it is the only firm in the market (that is, monopoly). Find the output level and price set by the firm based on your graph in (1). (You do not need to derive...
Suppose the individual inverse demand curves for person A and person B, respectively, are given by:...
Suppose the individual inverse demand curves for person A and person B, respectively, are given by:             PA = 80 - 0.6qA             PB = 50 -  0.5qB                          and that MC = $40.              Derive the inverse market demand curve? (Hint: sum the two demand curves vertically). What’s the price and the quantity at the kink point? First draw the inverse individual demands for persons A and B in the same graph by connecting their horizontal and vertical intercepts. (Hint: Sum up...
The market inverse demand curve is P = 85 – Q. There are i firms in...
The market inverse demand curve is P = 85 – Q. There are i firms in the market with all firms (plants) that have cost function TCi = 20 + qi + qi^2. Find the market profit for a maximizing multiplant-monopoly assuming two plants.
Q1. A monopolist has the following demand function and marginal cost function P = 120 –...
Q1. A monopolist has the following demand function and marginal cost function P = 120 – Q and MC = 30 + Q. i. Derive the monopolist’s marginal revenue function. ii. Calculate the output the monopolist should produce to maximize its profit. ii. (continuation) iii. What price does the monopolist charge to maximize its profit? Now assume that the monopolist above split into two large firms (Firm A and Firm B) with the same marginal cost as the monopolist. Let...
A firm is selling its product in two markets. In market A the demand is given...
A firm is selling its product in two markets. In market A the demand is given by QA = 100 − 2P and in market B the demand is QB = 80 − 4P. The firm’s total cost is C = 10Q where Q = QA + QB is the total output. a) Suppose the monopolist cannot discriminate between markets A and B. What is the total demand ? (1 pt) Find the profit-maximizing price and quantity (2 pt), and...
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand...
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand function P = 400 – 2Q where Q = Qa + Qb. Firm a has the cost function Ca = 100 + 15Qa and firm b has the cost function Cb = 100 + 15Qb. Use this information to compare the output levels, price and profits in settings characterized by the following markets: Cournot Stackelberg Bertrand Collusion
Consider a firm with the demand function P(Q)=(50-2Q), and the total cost function TC(Q)=10,000+10Q. Find the...
Consider a firm with the demand function P(Q)=(50-2Q), and the total cost function TC(Q)=10,000+10Q. Find the profit maximizing quantity. Calculate the profit maximizing price (or the market price). Hint: MR(Q)=(50-4Q),