9. A monopolistic producer of two goods, 1 and 2, has a joint total cost function TC - 100, +00, +10Q, where and 2 denote the quantity of items of goods 1 and 2, respectively that are produced. If P, and P, denote the corresponding prices then the demand equations are P = 50 –Q + Q. P, = 30 + 20, -Q. Using the Lagrange multiplier approach, find the maximum profit if the firm is contracted to produce a total of 15 goods of either type. Estimate the new optimal profit if the production quota rises by 1 unit.

9. A monopolistic producer of two goods, 1 and 2, has a joint total cost function TC - 100, +00, +10Q, where and 2 denote the quantity of items of goods 1 and 2, respectively that are produced. If P, and P, denote the corresponding prices then the demand equations are P = 50 –Q + Q. P, = 30 + 20, -Q. Using the Lagrange multiplier approach, find the maximum profit if the firm is contracted to produce a total of 15 goods of either type. Estimate the new optimal profit if the production quota rises by 1 unit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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