a) A firm produces two goods Q1 and Q2 and the firm should produce a maximum of 40 units of both Q1 and Q2. The demand function for Q1 is Q1-120-0.5P1 And the demand function for Q2 is Q2-80-0.25P2. The total cost of the firm is TC=Q1² + Q1Q2 + Q2² +45 Use the Lagrange Method of constrained optimization and optimize the Profit and find all the optimal values. b) Now use the Bordered Hessian method to show that all the optimal values that you find in (a) maximize the profit Show the second order conditions only

a) A firm produces two goods Q1 and Q2 and the firm should produce a maximum of 40 units of both Q1 and Q2. The demand function for Q1 is Q1-120-0.5P1 And the demand function for Q2 is Q2-80-0.25P2. The total cost of the firm is TC=Q1² + Q1Q2 + Q2² +45 Use the Lagrange Method of constrained optimization and optimize the Profit and find all the optimal values. b) Now use the Bordered Hessian method to show that all the optimal values that you find in (a) maximize the profit Show the second order conditions only

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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