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

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Definitions:

Recognize Gain

The process by which an individual or entity reports the profit earned from the sale of an asset that has increased in value over its purchase price.

Partnership Interest

Ownership stake in a partnership, representing rights to its profits and assets.

Accounting Work

The activities involved in maintaining and auditing records and preparing financial reports for a business or individual.

Inventory

The total value of goods and materials held by a company for the purpose of resale or production.