Question

Enpar manufactures engine parts for Ford using two plants, one in Detroit, MI and one in Greenville, SC. The inverse demand functions (demand curves) for the two Enpar plants are: Detroit: PD = 35 – 0.25 QD Greenville: PG = 60 – 0.50 QG where QD and QG are outputs of engine parts (in units) from the Detroit and Greenville plants, respectively. The marginal cost of production in Detroit (MCD) is 15 and the marginal cost of production in Greenville (MCG) is 20. If Enpar has a total produce limit of 140 units of engine parts, how many of the engine parts should be produced in Detroit (QD)?

Answer 1

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