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A monopolist has two plants. Suppose the Market demand is P = 100 - Q (i.e., MR =100 - 2Q) and Q = Qa + Qb. Where Qa and Qb are quantities produced from two plants respectively. The total cost curves for two plants are given as
TCa = 0.5Qa2 - 10Qa and TCb = 0.25Qba2 - 5Qb
Thus, equilibrium allocation of output to two plants would be
(Hint: a similar question was done in class from the textbook. It's long question, solve it.)
a. Qa = Qb = 35
b. Qa = 38 and Qb = 24
c. Qa = 35 and Qb = 70
d. Qa = 27 and Qb = 32
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