Monopolist that owns two mines

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Reference no: EM13886536

Boron Industries is a monopolist that owns two mines. Mine B is smaller and has less capacity, thus its marginal costs rise more steeply than Mine A’s. Mine A has TCa = 5000 + 50*qa + 2 qa2 Mine B has TCb = 8000 + 50*qb + 3qb2 a. (1) Before knowing demand, can you tell whether the firm might choose to operate just one of the two mines? Explain. b. (5) Now assume inverse demand for the firm’s output is P = 1150 - Q. Find optimal output at each plant, the monopolist’s total output, price, and profit or loss.

Reference no: EM13886536

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