In: Economics
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.