Monopoly with Two Plants
Monopoly with Two Plants
This Demonstration shows how a monopolist chooses the price and the distribution of production quantity among several plants. For the sake of simplicity, only the case with two plants is considered. So +=Q holds, where stands for the production volume of the respective plant. Once understood, this task can be easily extended to an arbitrary number of plants with more complex marginal cost functions. This model can be used in conjunction with other monopolist's problems—that is, when she faces several markets.
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