ii. A firms total cost functions for its two plants (both producingthe same single product) are:C1 = 3q1? + 2q1+6C2 = 2q2² + 2q2 + 4where q1 and q½ are the outputs at the respective plants. Thefirms average revenue function is:AR = 74 – 6qwhere q = q1 + q2 and p is the price of the product. If profitsare to be maximised:A. How much should be produced in each plant? Show theseare profit maxima.B. What will profits be under these quantities?

TC1 = 3q12 +2q1 + 6 TC2 = 2q22 +2q2 + 4 Average Revenue (AR) = 74 - 6q q = q1 + q1

ii. A firms total cost functions for its two plants (both producing the same single product) are: C1 = 3q1? + 2q1+6 C2 = 2q22 + 2q2 + 4 where q1 and q2 are the outputs at the respective plants. The firms average revenue function is: AR = 74 – 6q %3D where and is the price of the product. If profits q = q1 + q2 are to be maximised: A. How much should be produced in each plant? Show these are profit maxima. B. What will profits be under these quantities?

ii. A firms total cost functions for its two plants (both producing the same single product) are: C1 = 3q1? + 2q1+6 C2 = 2q22 + 2q2 + 4 where q1 and q2 are the outputs at the respective plants. The firms average revenue function is: AR = 74 – 6q %3D where and is the price of the product. If profits q = q1 + q2 are to be maximised: A. How much should be produced in each plant? Show these are profit maxima. B. What will profits be under these quantities?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

ii. A firms total cost functions for its two plants (both producing
the same single product) are:
C1 = 3q1? + 2q1+6
C2 = 2q2² + 2q2 + 4
where q1 and q½ are the outputs at the respective plants. The
firms average revenue function is:
AR = 74 – 6q
where q = q1 + q2 and p is the price of the product. If profits
are to be maximised:
A. How much should be produced in each plant? Show these
are profit maxima.
B. What will profits be under these quantities?

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