1. A monopolist produces two commodities that are substitutes and having demand functions: X-8-P+P and X=9+P-5P,...

 

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1. A monopolist produces two commodities that are substitutes and having demand functions: X-8-P+P and X=9+P-5P, where 1,000 X, units of first commodity are demanded if its price is Rs P, per unit and 1,000X Units of the Second commodity are demanded if its price is Rs P, per units. It costs Rs 4 to produce each unit of the first commodity and Rs 2 to produces each unit of the second. Find the output levels and prices of the two commodities in order to have maximum profit. 1. A monopolist produces two commodities that are substitutes and having demand functions: X-8-P+P and X=9+P-5P, where 1,000 X, units of first commodity are demanded if its price is Rs P, per unit and 1,000X Units of the Second commodity are demanded if its price is Rs P, per units. It costs Rs 4 to produce each unit of the first commodity and Rs 2 to produces each unit of the second. Find the output levels and prices of the two commodities in order to have maximum profit.

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