Management Kdan Cloud main-2-11 2 A= Outlines Q Search R Share Tool TT Ov Comment & Markup ►Functions of two variables Solutions 195% + T Annotation FAX OCR Q Editor OCR Convert Fax Search ii. Add a contour plot for the profit function and use this to estimate the maximum profit that the company can realize with this budget and the corresponding production amounts. iii. Now find the exact values for the production amounts and the maximum profit by compu- tation. 19. A firm produces two product: ⚫ a niche product with inverse demand function given by p₁ = 100-291, and • a standard product with fixed price of 2 monetary units, so p2 = 2. The variable production cost for the niche product is 5 monetary units per unit of production; for the standard product it is 1 monetary unit per unit of production. There is a fixed production cost of 100. (a) Find the equation of the revenue function R (91,92), as well as its domain. (b) Show on a graph which production amounts for the two products lead to a revenue strictly in between 1000 and 1500 monetary units. (c) The firm has a budget of 400 monetary units. Add the corresponding isocost line to the graph from part b. (d) Indicate on the graph those production amounts for the two products that lead to the budget of 400 monetary units being completely spent and giving a revenue in between 1000 and 1500 monetary units. (e) What is the minimal budget needed for a revenue of 1000 monetary units? What is the minimal budget needed for a revenue of 1500 monetary units? First answer this question graphically (giving an approximate answer), and then exactly by calculation. PDF Oops! This version of PDF Reader you are using is outdated. Please upgrade to the latest version! 10 /10
Management Kdan Cloud main-2-11 2 A= Outlines Q Search R Share Tool TT Ov Comment & Markup ►Functions of two variables Solutions 195% + T Annotation FAX OCR Q Editor OCR Convert Fax Search ii. Add a contour plot for the profit function and use this to estimate the maximum profit that the company can realize with this budget and the corresponding production amounts. iii. Now find the exact values for the production amounts and the maximum profit by compu- tation. 19. A firm produces two product: ⚫ a niche product with inverse demand function given by p₁ = 100-291, and • a standard product with fixed price of 2 monetary units, so p2 = 2. The variable production cost for the niche product is 5 monetary units per unit of production; for the standard product it is 1 monetary unit per unit of production. There is a fixed production cost of 100. (a) Find the equation of the revenue function R (91,92), as well as its domain. (b) Show on a graph which production amounts for the two products lead to a revenue strictly in between 1000 and 1500 monetary units. (c) The firm has a budget of 400 monetary units. Add the corresponding isocost line to the graph from part b. (d) Indicate on the graph those production amounts for the two products that lead to the budget of 400 monetary units being completely spent and giving a revenue in between 1000 and 1500 monetary units. (e) What is the minimal budget needed for a revenue of 1000 monetary units? What is the minimal budget needed for a revenue of 1500 monetary units? First answer this question graphically (giving an approximate answer), and then exactly by calculation. PDF Oops! This version of PDF Reader you are using is outdated. Please upgrade to the latest version! 10 /10
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Management Kdan Cloud
main-2-11 2
A=
Outlines
Q Search
R
Share
Tool
TT Ov
Comment & Markup
►Functions of two variables
Solutions
195%
+
T
Annotation
FAX
OCR
Q
Editor
OCR Convert
Fax
Search
ii. Add a contour plot for the profit function and use this to estimate the maximum profit that
the company can realize with this budget and the corresponding production amounts.
iii. Now find the exact values for the production amounts and the maximum profit by compu-
tation.
19. A firm produces two product:
⚫ a niche product with inverse demand function given by p₁ = 100-291, and
• a standard product with fixed price of 2 monetary units, so p2 = 2.
The variable production cost for the niche product is 5 monetary units per unit of production; for
the standard product it is 1 monetary unit per unit of production. There is a fixed production cost
of 100.
(a) Find the equation of the revenue function R (91,92), as well as its domain.
(b) Show on a graph which production amounts for the two products lead to a revenue strictly in
between 1000 and 1500 monetary units.
(c) The firm has a budget of 400 monetary units. Add the corresponding isocost line to the graph
from part b.
(d) Indicate on the graph those production amounts for the two products that lead to the budget
of 400 monetary units being completely spent and giving a revenue in between 1000 and 1500
monetary units.
(e) What is the minimal budget needed for a revenue of 1000 monetary units? What is the minimal
budget needed for a revenue of 1500 monetary units? First answer this question graphically
(giving an approximate answer), and then exactly by calculation.
PDF
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is outdated. Please upgrade to the latest version!
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