Exercise 11

Monopolist with two independent goods

Theory used: Maximum profit with two goods Hessian test

A monopolist sells two goods with inverse demands $p_{1} = 40 - q_{1}$ and $p_{2} = 60 - 2 q_{2}$ and has cost $C (q_{1}, q_{2}) = q_{1}^{2} + q_{2}^{2} + 100$ . Find the quantities, the prices and the maximum profit.

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