a) A firm produces two commodities X and Y. If the firms profit function is given...

 

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a) A firm produces two commodities X and Y. If the firms profit function is given as: П=144X-3X²-XY-2Y²+120Y-35 i). Determine the level of output of each commodity at which the firm maximizes its profit. (6 Marks) ii). Determine the value of the maximum amount of the total profit of the firm. (4 Marks) b) The demand curve for product X is given by Qxd = 300 - 2Px. i). Find the inverse demand curve (use decimals in place of fractions). Px = 150 - 0.5Qxd (2 Marks) ii). How much consumer surplus do consumers receive when Px = K45? (2 Marks) iii). How much consumer surplus do consumers receive when Px = K30? (2 Marks) iv). In general, will the level of consumer surplus increase, decrease or remain the same as the price of a good falls. (2 Marks) v). What type of good is product X? (2 Marks) a) A firm produces two commodities X and Y. If the firms profit function is given as: П=144X-3X²-XY-2Y²+120Y-35 i). Determine the level of output of each commodity at which the firm maximizes its profit. (6 Marks) ii). Determine the value of the maximum amount of the total profit of the firm. (4 Marks) b) The demand curve for product X is given by Qxd = 300 - 2Px. i). Find the inverse demand curve (use decimals in place of fractions). Px = 150 - 0.5Qxd (2 Marks) ii). How much consumer surplus do consumers receive when Px = K45? (2 Marks) iii). How much consumer surplus do consumers receive when Px = K30? (2 Marks) iv). In general, will the level of consumer surplus increase, decrease or remain the same as the price of a good falls. (2 Marks) v). What type of good is product X? (2 Marks)

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a To find the level of output of each commodity at which the firm maximizes its profit we need to take partial derivatives of the profit function with ... View the full answer