ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
The total cost equation for a firm producing two products is
TC(Q1, Q2) = 25 + Q12 + 4Q22 + 5Q1Q2
(d) Suppose that the firm is currently producing 5 units of Q1, and 10 units of Q2, What is the firm's total cost of production?
e) Suppose that the firm divests itself of the division selling Q1 to a competitor. How much will it cost the firm to continue producing 10 units of Q2? What is the total cost of producing both Q1 and Q2 if the firm producing Q1 produces 5 units?
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