A monopolist's inverse demand function is P = 150 - 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2.
a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recall that Q1 + Q2 = Q.)
MR(Q) = - Q1 - Q2
b. Determine the profit-maximizing level of output for each facility.
Output for facility 1:
Output for facility 2:
c. Determine the profit-maximizing price.
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