ECO-Suppose a product can be produced using virgin ore at a marginal cost

| November 24, 2016

Suppose a product can be produced using virgin ore at a marginal cost given by MC1 = 0.5q1 and with recycled materials at a marginal cost given by MC2 = 5 + 0.1q2.
If the inverse demand curve were given by P = 10 – 0.5(q1 + q2), how many units of the product would be produced with virgin ore and how many units with recycled materials?
If the inverse demand were given by P = 20 – 0.5(q1 + q2), what would your answer be?

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