A two product firm faces the following demand and cost functions Q1=40-2p1-2p2 and Q2=35-p1-p2 & C=Q²1+2Q²2+10. a)Find the output levels that satisfy the 1st order conditions for maximum profit. b) check the 2nd order for sufficient condition. Can you conclude that this problem posses a unique maximum? C) what is the maximal profit?
A two product firm faces the following demand and cost functions Q1=40-2p1-2p2 and Q2=35-p1-p2 & C=Q²1+2Q²2+10. a)Find the output levels that satisfy the 1st order conditions for maximum profit. b) check the 2nd order for sufficient condition. Can you conclude that this problem posses a unique maximum? C) what is the maximal profit?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A two product firm faces the following
a)Find the output levels that satisfy the 1st order conditions for maximum profit.
b) check the 2nd order for sufficient condition. Can you conclude that this problem posses a unique maximum?
C) what is the maximal profit?
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