A Monopoly Has Two Production Plants with Cost Functions C₁

question 55

Multiple Choice

A monopoly has two production plants with cost functions C₁ = 50 + 0.1Q₁² and C₂ = 30 + 0.05Q₂².The demand it faces is Q = 500 − 10P.What is the profit-maximizing level of output?

• A) Q₁ = 62.5; Q₂ = 125.
• B) Q₁ = 125; Q₂ = 62.5.
• C) Q₁ = Q₂ = 125.
• D) Q₁ = Q₂ = 62.5.

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