2. Given a firm's demand function Q-90+2P=0 and its average cost function AC= Q2-39.5Q+120+(125/Q) find the...

2. Given a firm's demand function Q-90+2P=0 and its average cost function
AC= Q2-39.5Q+120+(125/Q)
find the level of output (Q) which
a) Maximizes Total Revenue
b) Minimizes Marginal Cost
c) Maximizes Profits.
3. A monopolistic firm has the following demand functions for each of its products X and Y:
X=72-0.5Px Y=120-Py
The combined cost function is C=X2+XY+Y+35. The maximum production capacity is 40 and given by X+Y=40. Find the profit maximizing levels of output, prices and profit.

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Expert Solution

Rahul Sunny answered 1 year ago

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