Consider a monopoly with inverse demand function p = 24 - y and costfunction c(y) = 5y2 + 4:
i) Find the profit maximizing output and price, and calculate the monopolist's profits.
ii) Now considerthe case in which the monopolist has now another plant with the cost structure c 2(y2) = 10y2.
How much will the monopolist produce in each plant, what is the price, and the total profits of the monopoly?
iii) Now suppose there is a technological change in the first plant and it has the following costfunction: c 1 (y1)= 2y1. How much will the monopolist produce in each plant and what is the price?