Q6. A firm produces two goods: widgets (X) and woozles (Y). Its profit function is given by:

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Q6. A firm produces two goods: widgets (X) and woozles (Y). Its profit function is given by:

P = 55X – 2X²– XY – 3Y² + 100Y

and its maximum output capacity is X + Y = 17.

(a) Use the Lagrangian method to calculate the output mix the firm should produce.

(b) Estimate the effects on profits if output capacity is expanded by 1 unit.

(c) You are hired by the firm to evaluate a proposal from its Engineering Department that the firm’s output capacity be expanded to 33. Do you agree with the proposal? If not, what output capacity would you recommend?

Related Book For answer-question

Modern Control Systems

ISBN: 978-0136024583

12th edition

Authors: Richard C. Dorf, Robert H. Bishop

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Posted Date: Jun 18, 2020 05:19 AM

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Q6. A firm produces two goods: widgets (X) and woozles (Y). Its profit function is given by:

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Modern Control Systems

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