Question 1; NAPA Corporation's marginal cost is expressed by MC = 4 + 3Q, where MC is marginal cost and Q is the
number of products produced. The price of a unit of its products is $3. If you are the consultant for the company, would you advise the firm to produce or shut down? Briefly explain your decision.
Question 2: Dashen Company is a monopoly that produces at two plants. The demand for its product is given by P = 20 - Q. The marginal cost of plant 1 is MC1 = 2, and the marginal cost of plant 2 is MC2 = 2Q2.
Question 1: The profit maximizing production quantity is where, MC = MR In this case, MR = Price = $3 Thus, MC = MR => 4 +... View the full answer