Question
A firm produces two goods and in pure competition and has the following total revenue and total cost functions: TR=7Q 1 +9Q 2 TC=Q 1
A firm produces two goods and in pure competition and has the following total revenue and total cost functions:
TR=7Q1+9Q2 TC=Q12+2Q1+5Q2+2Q22
Maximize profits for the firm using (i) Cramer's rule for the first-order condition (Ans.Q1=2.5;Q2=1 ) and (ii) the Hessian for the second-order condition
(Ans.|H1|=-2<0and |h2|=8>0;|H| is negative definite and II is maximized).
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Precalculus
Authors: Jay Abramson
1st Edition
1938168348, 978-1938168345
