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Refer to the Following:
a Firm Sells Two Goods (X

Question 46

Multiple Choice

Refer to the following:
A firm sells two goods (X and Y) that are related in consumption. The estimated demand and cost conditions are:
PX=200.1QX0.05QyPy=700.3Qy0.1QXMCX=1+0.1QXMCy=2+0.25Qy\begin{array} { l } P _ { X } = 20 - 0.1 Q _ { X } - 0.05 Q _ { y } \\P _ { y } = 70 - 0.3 Q _ { y } - 0.1 Q _ { X } \\M C _ { X } = 1 + 0.1 Q _ { X } \\M C _ { y } = 2 + 0.25 Q _ { y }\end{array}
-What are the profit-maximizing prices for the two goods?


A) PXP _ { X } = $25.60, PyP _ { y } = $20.50
B) PXP _ { X } = $30, PyP _ { y } = $35
C) PXP _ { X } = $50, PyP _ { y } = $45
D) PXP _ { X } = $11.20, PyP _ { y } = $42.70

Correct Answer:

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