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oods in pure competition and has the following total revenue and total cost functions: TR = P1Q1 + P2Q2 and TC = 2Q12 + Q1Q2 +2Q22 Where, P1 = 12 and P2 = 18. a)Form the profit function and ide

oods in pure competition and has the following total revenue and total cost functions: TR = P1Q1 + P2Q2 and TC = 2Q12 + Q1Q2 +2Q22 Where, P1 = 12 and P2 = 18. a)Form the profit function and ide

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A firm produces two goods in pure competition and has the following total revenue and total cost functions:

TR = P1Q1 + P2Q2 and

TC = 2Q12 + Q1Q2 +2Q22

Where, P1 = 12 and P2 = 18.

a)Form the profit function and identity the critical value Q1* & Q2*.
b)Construct the Hessian matrix and calculate the value of |H1| & value of |H2|.
c)Based on the values of Hessian, what can you say about the profit?
 
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