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In: Economics

Suppose that your firm produces two products in fixed proportions, so that if you decide to...

Suppose that your firm produces two products in fixed proportions, so that if you decide to produce one more unit of X, your firm must also produce one more unit of Y. If TC = 100 + 3Q +½Q2 and the demand curves for X and Y are
QX=100-2PX, and QY=101-PY find the profit maximizing outputs.
(a) Find the expressions for MR for good X and good Y. (Hint: solve each demand curve for P, multiply by Q, take the first derivative with respect to Q to get MR.)
(b) Find the expression for MC.
(c) Find the profit maximizing output.
(d) Find the price of each good.

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Expert Solution

Rahul Sunny answered 7 months ago
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