Assume the inverse demand for a monopolist's product is given by the; P(Q)=10-0.5Q
The monopolist can form the output in 2 plants. The marginal cost of producing in plant one is MC(subscript 1) = Q(subscript 1). The marginal cost of producing in the plant two is MC(subscript 2)= 2Q(subscript 2)
1. Explain how much output should be produced in each plant to maximize profit?
2. Discuss what price should the firm charge for its product to maximize profits?