Question

Question 2 [12 marks] A monopolistic produces two goods x and y for which the demand functions are $P_1 = 138 - 1.5Q_1$ $P_2 = 202 - 3.5Q_2$ and total cost function $C = 4Q_1^2 + 2Q_1Q_2 + 3Q_2^2 + 204$ a) find the profit maximizing level of output of each product. Proof that the profit is maximized. (8 marks) b) the profit maximizing price for each product (2 marks) c) the maximum profit (2 marks) Question 3 [8 marks] Find the equilibrium price and then find the consumers' surplus and producers' surplus at the equilibrium price level, $p = D(x) = 20 - 0.05x$ $p = S(x) = 2 + 0.0002x^2$

          Question 2 [12 marks]
A monopolistic produces two goods x and y for which the demand functions are
$P_1 = 138 - 1.5Q_1$
$P_2 = 202 - 3.5Q_2$
and total cost function $C = 4Q_1^2 + 2Q_1Q_2 + 3Q_2^2 + 204$
a) find the profit maximizing level of output of each product. Proof that the profit is
maximized. (8 marks)
b) the profit maximizing price for each product (2 marks)
c) the maximum profit (2 marks)
Question 3 [8 marks]
Find the equilibrium price and then find the consumers' surplus and producers'
surplus at the equilibrium price level,
$p = D(x) = 20 - 0.05x$
$p = S(x) = 2 + 0.0002x^2$

Question 2 [12 marks]
A monopolistic produces two goods x and y for which the demand functions are
P1 = 138 - 1.5Q1
P2 = 202 - 3.5Q2
and total cost function C = 4Q1^2 + 2Q1Q2 + 3Q2^2 + 204
a) find the profit maximizing level of output of each product. Proof that the profit is
maximized. (8 marks)
b) the profit maximizing price for each product (2 marks)
c) the maximum profit (2 marks)
Question 3 [8 marks]
Find the equilibrium price and then find the consumers' surplus and producers'
surplus at the equilibrium price level,
p = D(x) = 20 - 0.05x
p = S(x) = 2 + 0.0002x^2

Added by Veronica S.

Question

Please give Ace some feedback