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
icon
Related questions
Question
9. A monopolistic producer of two goods, 1 and 2, has a
joint total cost function
TC = 100, + Q,0, +10Q,
where 9 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.
Transcribed Image Text:9. A monopolistic producer of two goods, 1 and 2, has a joint total cost function TC = 100, + Q,0, +10Q, where 9 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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Elasticity of demand
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education