Producing%20in%20two%20plants

Producing%20in%20two%20plants - and C(Q 2 ) = 60,000 + 350Q...

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Acme Gizmo produces in two plants. The marginal costs of production are shown in the graphs below: Market demand for Acme’s product is shown below. How many gizmos will Acme produce and sell to maximize profits? What is Acme’s economic profit? 0 100 100 200 300 400 500 200 300 400 500 10 10 20 30 40 50 20 30 40 50 0 MC A MC B 0 50 800 700 600 500 400 300 200 40 30 20 10 100 D
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The Midwest Electric company produces electricity in two plants. Its costs per unit of power are C(Q 1 ) = 20,000 + 500Q 1 + 5Q 1 2 in its first plant
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Unformatted text preview: and C(Q 2 ) = 60,000 + 350Q 2 + 2Q 2 2 in its second plant. Marginal costs of production are dC(Q 1 )/dQ 1 = 500 + 10Q 1 and dC(Q 2 )/dQ 2 = 350 + 4Q 2 . Demand for Midwest Electrics product is Q = 400 (1/5)P. 3. How many units of power will Midwest produce in the first plant? Second plant? 4. What will the company charge per unit of power? 5. What will the companies profits be?...
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This note was uploaded on 02/06/2011 for the course ECON 415 taught by Professor Holland during the Summer '09 term at Purdue University-West Lafayette.

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Producing%20in%20two%20plants - and C(Q 2 ) = 60,000 + 350Q...

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