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November 12th, 2013, 10:00 AM   #1
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Monopoly profits

Hey guys,

Can someone help me to compute the monopoly profits of the following situation.
- 2 products
- 2 demand functions given by;
* P(1)= 60 - Q(1) - 0.5Q(2)
* P(2)= 60 - Q(2) - 0.5Q(2)
- Cost are 0

Is it correct that I should use: MC=MR
MC=0
MR= P(1) * Q(1) + P(2) * Q(2) ??
FOC ??

Thanks for helping me out.

Last edited by skipjack; April 24th, 2014 at 04:44 PM.
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April 25th, 2014, 05:17 AM   #2
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Is the first equation (with a term involving Q(2)) given correctly?

I don't understand why you asked about "MC = MR"; was that a typing error?
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April 25th, 2014, 06:16 AM   #3
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Quote:
Originally Posted by skipjack View Post
I don't understand why you asked about "MC = MR"
Marginal consumption = marginal revenue, I imagine.
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