Assume a firm produces both gasoline and diesel fuel from crude oil at their refinery. Given the same inputs they can produce either gasoline y_1 or diesel y_2, both of which share the joint production function x = y_1^2y _2^2 1. Find the firm's total cost curve c(y_1, y_2)assuming the per unit price of crude oil is w = 52. Find the marginal cost curve for y_1 3. Suppose the price of y_1, p_1 = 30 and the price of y_2, p_2 = 10 and the per unit price of crude oil is w = 5, what is the optimal amount of y_1for the firm to produce?

Assume a firm produces both gasoline and diesel fuel from crude oil at their refinery. Given the same inputs they can produce either gasoline y_1 or diesel y_2, both of which share the joint production function x = y_1^2y _2^2 1. Find the firm's total cost curve c(y_1, y_2)assuming the per unit price of crude oil is w = 52. Find the marginal cost curve for y_1 3. Suppose the price of y_1, p_1 = 30 and the price of y_2, p_2 = 10 and the per unit price of crude oil is w = 5, what is the optimal amount of y_1for the firm to produce?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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