ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Constrained Optimization
A firm's total cost function is: C = 6x2 - xy + 10y2 + 30, subject to the production quota x + y = 34.
Construct the Lagrange function and solve for the equilibrium values. Calculate the total cost.
What is the equilibrium value of x?
What is the equilibrium value of y?
What is the equilibrium value of λ?
What is the optimized value of cost?
What is the value of the determinant of the bordered Hessian matrix?
Based on the value of the determinant of the bordered Hessian matrix, comment on the optimized value of Cost. (Answer in one word.)
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