A monopolist produces two goods as follows: p= 11-0.5x, q = 51- 0.5y where p and q are prices per unit of the two goods, and x and y are the corresponding quantities. The cost function is given by C(x,y) = x+y 1. Derive the firm's total profit function. 2. Find the values of x and y that maximize profit. 3. Verify that you have found the maximum profit. 4. Suppose that the firm is required to produce a total of 60 units only. Find the values of x and y that maximize profits.

A monopolist produces two goods as follows: p= 11-0.5x, q = 51- 0.5y where p and q are prices per unit of the two goods, and x and y are the corresponding quantities. The cost function is given by C(x,y) = x+y 1. Derive the firm's total profit function. 2. Find the values of x and y that maximize profit. 3. Verify that you have found the maximum profit. 4. Suppose that the firm is required to produce a total of 60 units only. Find the values of x and y that maximize profits.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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