1. Suppose the inverse demand function for a monopolistically competitive firmâ€™s product is given by ? = 100...

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Economics

1. Suppose the inverse demand function for amonopolistically competitive firmâ€™s product is givenby
? = 100 âˆ’2?
and the cost function is given by?? = 52 + 4?
1. Determine the profit-maximizing price and quantity
2. Determine the maximum profits.
3. Can we say that this firm is operating in the long-run orshort-run equilibrium at the equilibrium price and quantity?
2. Suppose the inverse demand for a monopolistâ€™s productis given by ? = 110 âˆ’
The monopolist can produce output in two plants. Themarginal cost of producing in plant 1 is??! =3?!, and themarginal cost of producing in plant 2 is??\" =2?\".
1. How much output should be produced in each plant to maximizeprofits?
2. What price should be charged for the product?

Answer & Explanation Solved by verified expert

4.1 Ratings (845 Votes)

II 1Given 100 2 We know Total Revenue TR Price X quantity Thus TR 1002QQ TR 100Q 2Q2 Marginal Revenue is defined as the change in total revenue when one more unit is sold Mathematically MR ddq TR That is MR ddq 100Q 2Q2 MR 100 4Q See Answer

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