Consider the graph below. It contains 2 separate demand curves, D1 and D2, the marginal revenue curve associated with each one, MR1 and MR2, a total marginal revenue curve, MRT, along with marginal cost. (You might want to look at page 586 in your book to get another example, only in that one the total marginal revenue curve is placed on the graph on the right...)
a. What is the TOTAL amount of output the firm should produce?
b. Approximately how much output should the firm allocate to market 1?
c. Approximately how much output should the firm allocate to market 2?
d. What is the approximate price that will be charged in market 1?
e. What is the approximate price that will be charged in market 2?

Transcribed Image Text:

50 40 MC 30 20 10 D2 MR 2 D1 MRT 50 100 150 200 250 300 350 400 500 450 Quantity Price and cost (dollars) %24