A perfectly competitive firm produces two goods, X and Y, which are sold at 24 and...

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A perfectly competitive firm produces two goods, X and Y, which are sold at £24 and £22 per unit, respectively. The firm has a total cost function given by TC=3x²+3xy+2y²-100 • Calculate the expression of the Profit Function Find the quantities of each good which must be produced and sold in order to maximise profits. What is the maximum profit? 1) Profit function = Blank 1x + Blank 2y - 3x²-3xy - 2y² + 100 2) Profit function has a maximum when quantity of x is equal Blank 3 and quantity of y is equal Blank 4, because the second order derivative of the function profit with respect to x is (positive of negative) Blank 5 at the statoinary point, the second order derivative of the function profit with respect to y is (positive of negative) Blank 6 at the stationary point and the value of the discriminant (or determinant of the Hessian Matrix) is equal to Blank 7. 3) Maximum Profit is equal to Blank 8 (Calculate the value of the Maximum profit using the values of x and y before rounding to one decimal). A perfectly competitive firm produces two goods, X and Y, which are sold at £24 and £22 per unit, respectively. The firm has a total cost function given by TC=3x²+3xy+2y²-100 • Calculate the expression of the Profit Function Find the quantities of each good which must be produced and sold in order to maximise profits. What is the maximum profit? 1) Profit function = Blank 1x + Blank 2y - 3x²-3xy - 2y² + 100 2) Profit function has a maximum when quantity of x is equal Blank 3 and quantity of y is equal Blank 4, because the second order derivative of the function profit with respect to x is (positive of negative) Blank 5 at the statoinary point, the second order derivative of the function profit with respect to y is (positive of negative) Blank 6 at the stationary point and the value of the discriminant (or determinant of the Hessian Matrix) is equal to Blank 7. 3) Maximum Profit is equal to Blank 8 (Calculate the value of the Maximum profit using the values of x and y before rounding to one decimal).

Answer rating: 100% (QA)

1The profit function can be calculated as follows Profit Total revenue Total cost Profit Price of X ... View the full answer