Share Tool + Management Kdan Cloud Topic 4 Questions A= Tv Tv Ov T Comment & Markup Annotation FAX OCR Q Editor OCR Convert Fax Search Outlines Q Search Optimization Unconstrained optimization Constrained optimization (... (b) Make a graph representing a contour map of the profit function and the budget constraint. Read from this graph whether the critical point obtained in part a indeed corresponds to a maximum. Explain. (c) To what extent is an increase of the budget for this product advantageous? 86. The production function of a company is given in terms of input amounts for two input factors by 9-392 The unit sale price for the product is 10 monetary units and the costs for the two input factors are 2 and 5 monetary units, respectively. (a) In the absence of any further restrictions, determine the input amounts for the two input factors that lead to maximal profit. Next, suppose that government regulations stipulate that the company must use exactly 32 units of input factor 1. (b) Under this restriction, which amount of input factor 2 yields maximal profit? (c) How many monetary units is the company willing to spend (approximately) on lobbying efforts at government level to raise the required amount of unit factor 1 by 1 unit (i.e. increase the 32 required units of input factor 1 to 33)? 87. The production function of a company is given by Q = K + L + KL and the production cost by C=K+2L as a function of the input amounts of capital (K) and labor (L). (a) Which combination of input amounts for capital and labor yields a maximal production if the budget (available and spent) is 100 monetary units? (b) What is the effect on the production level, approximately, when the budget is increased to 101 monetary units? (c) If the level of production is at 71 units, which combination of input amounts for capital and labor leads to a minimal budget? (d) How does this minimal budget change, approximately, if production is lowered to 69 units? 195% 6 17