< MTN 3G 12:01 You 30/12/2023, 00:17 iv. Question 10 a) A firm has been contracted to produce a total of 1900 units of two goods Q₁ and Q₂. The joint total cost equation for the production of the goods is given as: C(Q₁ Q₂) = 100Q₁ + Q1Q2 + 100Q2. The corresponding demand equations are: P₁ = 500-Q₁+1.5Q2 and P₂ = 300+ 1.5Q1-Q₂ @ 30% Where: P, is the price of good 1 and P₂ is the price of good 2. 1. Write an expression for the firm's profit. ii. Determine the profit-maximising output levels subject to the contract production quota. iii. How much profit will the firm make by producing to meet the contracted N All Media output? Estimate the new maximum profit if the production quota increases by 1 unit. --D

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Question
<
MTN 3G
12:01
You
30/12/2023, 00:17
iv.
Question 10
a) A firm has been contracted to produce a total of 1900 units of two goods Q₁ and Q₂.
The joint total cost equation for the production of the goods is given as:
C(Q₁ Q₂) = 100Q₁ + Q1Q2 + 100Q2. The corresponding demand equations are:
P₁ = 500-Q₁+1.5Q2 and P₂ = 300+ 1.5Q1-Q₂
@ 30%
Where: P, is the price of good 1 and P₂ is the price of good 2.
1.
Write an expression for the firm's profit.
ii.
Determine the profit-maximising output levels subject to the contract
production quota.
iii. How much profit will the firm make by producing to meet the contracted
N
All Media
output?
Estimate the new maximum profit if the production quota increases by 1 unit.
--D
Transcribed Image Text:< MTN 3G 12:01 You 30/12/2023, 00:17 iv. Question 10 a) A firm has been contracted to produce a total of 1900 units of two goods Q₁ and Q₂. The joint total cost equation for the production of the goods is given as: C(Q₁ Q₂) = 100Q₁ + Q1Q2 + 100Q2. The corresponding demand equations are: P₁ = 500-Q₁+1.5Q2 and P₂ = 300+ 1.5Q1-Q₂ @ 30% Where: P, is the price of good 1 and P₂ is the price of good 2. 1. Write an expression for the firm's profit. ii. Determine the profit-maximising output levels subject to the contract production quota. iii. How much profit will the firm make by producing to meet the contracted N All Media output? Estimate the new maximum profit if the production quota increases by 1 unit. --D
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