Output is a function of inputs x1 and x2: y = x₁ 1/4 x2 1/2. Total cost is a function of inputs x₁ and x2 and their corresponding prices, w1-3 and w2=6: c = 3x1+6x2. The price at which output can be sold is p = 6. What is the profit maximizing level of x1 for the firm to use in the long run? [Hint: set up the profit function, take partial derivatives. Solve for x1 or x2, then substitute back into original profit function. Now you will have a one variable optimization problem.] 1/4
Output is a function of inputs x1 and x2: y = x₁ 1/4 x2 1/2. Total cost is a function of inputs x₁ and x2 and their corresponding prices, w1-3 and w2=6: c = 3x1+6x2. The price at which output can be sold is p = 6. What is the profit maximizing level of x1 for the firm to use in the long run? [Hint: set up the profit function, take partial derivatives. Solve for x1 or x2, then substitute back into original profit function. Now you will have a one variable optimization problem.] 1/4
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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![Output is a function of inputs x1 and x2: y = x1 1/4 x2 1/2. Total cost is a function of inputs x₁ and x2 and their corresponding prices, w1=3 and w2=6: c = 3x1+6x2. The price at which output can be sold is p
= 6. What is the profit maximizing level of x1 for the firm to use in the long run? [Hint: set up the profit function, take partial derivatives. Solve for x1 or x2, then substitute back into original
profit function. Now you will have a one variable optimization problem.]
O 1/4
O 1/8
O 1/12
O 1/16
4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85ae1c8e-4ca2-4677-8f05-e853be89a512%2F3f697428-d887-4335-bd55-f4c764ed7200%2Fs3qjl2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Output is a function of inputs x1 and x2: y = x1 1/4 x2 1/2. Total cost is a function of inputs x₁ and x2 and their corresponding prices, w1=3 and w2=6: c = 3x1+6x2. The price at which output can be sold is p
= 6. What is the profit maximizing level of x1 for the firm to use in the long run? [Hint: set up the profit function, take partial derivatives. Solve for x1 or x2, then substitute back into original
profit function. Now you will have a one variable optimization problem.]
O 1/4
O 1/8
O 1/12
O 1/16
4
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