Purchase Solution

maximum profits

Not what you're looking for?

Ask Custom Question

A monopolist with two plants operates with a marginal revenue of 500-4Q and marginal costs of 4Q for plant 1 and 2Q for plant 2.

What are outputs at each plant to maximize profits?

What price maximizes profits?

What are maximum profits?

Purchase this Solution
Solution Summary

This solution determines maximum profits.

Solution Preview

part a)
Let plant 1 produces q1 and plant 2 produces q2
Q=q1+q2
For profit maximization MC=MR or MR=MC1=MC2
MR=500-4Q=500-4q1-4q2
MC1=4q1
Equating MR=MC1, we get 500-4q1-4q2=4q1 or we can say 2q1+q2=125 eq--1

MC2=2q2
Equating MR=MC2, we get 500-4q1-4q2=2q2 or we can say ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Total cost function and the production line

    10Q + 0.1Q2 Maximum short-run profits: $45Q - (10,000 + 10Q + 0.1Q2) Maximum short-run profits: $45Q - 10,000 - 10Q - 0.1Q2) Maximum short-run profits: $35Q - 10,000 - 0.1Q2 Derivative of Maximum short-run profits: $35Q - 10,000 - 0.1Q2 Maximum

  • maximum profits

    This job determines maximum profits in the case. Demand curves for two groups are represented.

  • Wage and Compensation Plans for Motivating Employees

    However, the employee has an opportunity to earn an additional amount of up to 0.1%*80,000=$80 per day if they are putting their maximum efforts. Thus, if employees are putting their maximum efforts then firm is expected to earn $80,000 profits.

  • Selecting optimal output level

    So, P=Price=$130 ATC=Average total cost=$110 Q=Quantity=7 units Maximum Profits=(P-ATC)*Q=(130-110)*7 =$140 d.What adjustments should the manager be anticipating? Firm is making profits currently.

  • Calculating maximum profit made by a coal producer

    Let us find total cost at Q=25000 TC=187500+5Q+0.0003Q^2=187500+5*25000+0.0003*25000^2=$500000 Total Revenue =TR=Price*output=20*25000=$500000 Maximum profit=TR-TC=500000-500000=0 Firm will not able to make any economic profits in this case

  • total, average, and marginal product curves

    What are the max profits the firm can earn if it sells the Q for $5.50 at market? Maximum profits = 417.50 Calculations shown above in table. e.

  • Quadratic Model: Completing the Square to Solve a Maximum Profit Question

    (a) How many units of pies should Steve bake in order to maximize profits? (b) What is the maximum profit Steve can make?

  • Consumer Surplus and Maximizing Profits

    If exact information about the value of each individual product for each individual consumer was available, the firm could earn maximum profits by precisely tying the price charged to the marginal value derived by each customer. A.

  • Price-Quantity Combination to Maximize Profit

    What price-quantity combination maximizes your firm's profits? b. Calculate the maximum profits c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price-quantity combination? d.

View More Related Solutions