Profit function-marginal cost and economies of scope

Reference no: EM1315983

Consider a firm selling two different products at two different plants. The cost function for both plants is given by C (q₁, q₂) = q₁² + αq₁q₂ + q₂².

a) What is the marginal cost of producing one more unity of good 1? Of good 2?

b) Write down the total profit function for a perfectly competitive firm selling these two goods.

c) What are the TWO first order conditions for this firm?

d) For what values of α does the firm face economies of scope?

Reference no: EM1315983

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