A Monopoly Has Two Production Plants with Cost Functions C₁

question 70

Multiple Choice

A monopoly has two production plants with cost functions C₁ = 40 + 0.2 Q₁² and C₂ = 50 + 0.1 Q₂².The demand it faces is Q = 480 − 5P.What is the profit-maximizing level of output?

• A) Q₁ = 50; Q₂ = 100
• B) Q₁ = 60; Q₂ = 120.
• C) Q₁ = Q₂ = 75
• D) Q₁ = Q₂ = 100

---

Definitions:

Economic Activity

Economic activity refers to activities related to the production, distribution, exchange, and consumption of goods and services in an economy.

Economic Entities

Organizations or individuals engaged in economic activities, recognized as separate units for accounting and financial reporting.