1. Suppose the inverse demand function for amonopolistically competitive firm’s product is givenby
? = 100 −2?
and the cost function is given by?? = 52 + 4?
1. Determine the profit-maximizing price and quantity
2. Determine the maximum profits.
3. Can we say that this firm is operating in the long-run orshort-run equilibrium at the equilibrium price and quantity?
2. Suppose the inverse demand for a monopolist’s productis given by ? = 110 −
The monopolist can produce output in two plants. Themarginal cost of producing in plant 1 is??! =3?!, and themarginal cost of producing in plant 2 is??\" =2?\".
1. How much output should be produced in each plant to maximizeprofits?
2. What price should be charged for the product?
