A Firm Sells Two Goods (X and Y)that Are Related

question 55

Multiple Choice

A firm sells two goods (X and Y) that are related in consumption.The estimated inverse demand and cost functions are: $$\begin{array} { l } P _ { X } = 105 - 0.5 Q _ { X } - 0.75 Q _ { Y } \\P _ { Y } = 120 - Q _ { Y } - 0.5 Q _ { X } \\M C _ { X } = 10 + 0.25 Q _ { X } \\M C _ { Y } = 16 + 0.5 Q _ { Y }\end{array}$$
What are the profit-maximizing prices for the two goods?

• A) \(P _ { X }\) = $40, \(P _ { y }\) = $32.50
• B) \(P _ { X }\) = $53.50, \(P _ { y }\) = $61
• C) \(P _ { X }\) = $80, \(P _ { y }\) = $55
• D) \(P _ { X }\) = $112.50, \(P _ { y }\) = $87.75
• E)none of the above

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