Answer to Question #280954 in Microeconomics for abeni

Question

Given the following demand and cost function, find the prices and output in each Market and the total profit, Assume that there are only two firms in the market.

P1 = 32 – 2Q1

P1 = 22 – Q2

TC = 10 + 2Q1 + Q2

Answer 1

TR1=Q1*P1=(32 – 2Q1)Q1

TR2=Q2*P2= (22 – Q2)Q2

MR1=32-4Q1

MR2= 22 – 2Q2

MC=TC=3

32-4Q1=3

Q1=7.25

22 – 2Q2=3

Q2=9.5

P1=32 – 2Q1=32-2*7.25=17.5

P2= 22 – Q2=22-9.5=12.5

TC = 10 + 2Q1 + Q2=10+2*7.25+9.5=34

TR=7.25*17.5+9.5*12.5-34=211.625