A Firm Produces Two Products, "R" and "S", and the Production

question 52

Essay

A firm produces two products, "r" and "s", and the production process is such that one unit of "r" is always obtained with one unit of "s". If the demand curves for r and s are estimated to be:
Q_r = 75 - P_r so that MR_r = 75 - 2Q_r)
Q_s = 100 - .5P_s so that MR_s = 200 - 4Q_s)
and the marginal cost of production is MC = 75 + 4Q_j, where Q_j consists of one unit of each product, how much of product "r" and product "s" should the firm sell to maximize profit?

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