A Monopoly Has Two Production Plants with Cost Functions C₁

question 106

Multiple Choice

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

• A) $40 per unit
• B) $45 per unit
• C) $50 per unit
• D) $60 per unit

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Definitions:

Monthly Amount

A specific sum of money calculated or paid on a monthly basis for various financial obligations or income sources.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred, ensuring that financial statements reflect accurate values.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period.