Answer to Question #288255 in Microeconomics for african king

Question

In Nyeri town there are only two milk processors. The local inverse demand for milk is given by: Q = 120− P, where P denotes price, Q denotes the total quantity measured in cartons. Both milk processors have the same cost function given by C = 30Q, where C is total cost and Q is output measured in cartons. What is the industry output (Q)?

Answer 1

$Q=120-P$

Inverse Demand

$P=120-Q$

$C=30Q$

$MC=30$

$TR=P\times Q$

$=(120-Q)Q= 120Q-Q^2$

$MR=120-2Q$

For profit Maximization Out,

MR=MC

120-2Q=30

2Q=90

Q= 45