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Microeconomics: Maximize Revenues

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 78 - 15Q, where Q = Q1 + Q2. The marginal cost associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. What price should be charged in order to maximize revenues?
A. $39
B. $47
C. $52
D. $56

Solution Preview

Revenue depends only upon the price and quantity sold.

Q = ...

Solution Summary

This solution provides simple step-by-step calculations for determining the marginal revenue and optimum price and quantity.