A monopolist sells its product in two isolated markets with demand functions P1 = 32 − Q1 and P2 = 40 − 2Q2 The total cost function is TC = 4(Q1 + Q2). (a) Show that the profit function is given by π = 28Q1 + 36Q2 − Q12 − 2Q22 (b) Find the values of Q1 and Q2 which maximise profit and calculate the value of the maximum profit. Verify that the second-order conditions for a maximum are satisfied

/in /by

A monopolist sells its product in two isolated markets with demand
functions

P1 = 32 − Q1 and P2 = 40 − 2Q2

The total cost function is TC = 4(Q1 + Q2).

(a) Show that the profit function is given by

π = 28Q1 + 36Q2 − Q12 − 2Q22

(b) Find the values of Q1 and Q2 which maximise profit and calculate
the value of the

maximum profit. Verify that the second-order conditions for a maximum
are satisfied

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