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Find the maximum profit

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Reference no: EM132953293

A firm has two factories for which costs are given by: Factory 1: C1 (Q1) = 1.5Q1^2Factory 2: C2 (Q2) = 0.5Q2^2

The firm faces the following demand curve:

Q = 140 - 2P, where Q is the total output (i.e. Q = Q1 + Q2)

  1. Calculate the values of Q1, Q2, Q and P that maximize profits.
  2. Find the maximum profit.
  3. Show your answers from part a. graphically. Draw the demand (D), marginal revenue (MR), marginal
  4. cost of production in factory 1 (MC1), marginal cost of production in factory 2 (MC2) and total marginal cost of production (MCT). Label your axis, the intercepts and the points of interest (Q1, Q2, Q, MR and P that maximize profits).

Reference no: EM132953293

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