A Monopolist Owns Two Plants in Which to Produce a Product

question 7

Multiple Choice

A monopolist owns two plants in which to produce a product which has inverse demand P = (770/3) - 3Q. The monopolist has marginal cost curves of MC₁ = 20+3Q₁ and MC₂ = 10+6Q₂ in the two plants, respectively. Which of the following represents the optimal outputs in the two plants, Q₁ and Q₂ and the market price?

• A) Q₁ = 170/9; Q₂ = 100/9; P = 500/3.
• B) Q₁ = 100/9; Q₂ = 170/9; P = 500/3.
• C) Q₁ = 500/3; Q₂ = 170/9; P = 100/9.
• D) Q₁ = 500/3; Q₂ = 100/9; P = 170/9.

---

Definitions:

Eye Patch

A covering for one eye, often used for medical reasons, protection, or as part of a costume.

Sydney

A major city in Australia known for its iconic Opera House, Harbour Bridge, and as a leading global city in arts, commerce, education, and tourism.

Proximal Stimulus

The stimulus energies that directly interact with sensory receptors.

Distal Stimulus

An object or event in the outside world that provides the source of information that our sensory receptors respond to, as opposed to the perception (proximal stimulus) of the object or event formed in our minds.