Question: QUESTION 2 Consider a firm uses two inputs X and Y in its production giving the following total cost function: TC = 3X 2 +

QUESTION 2

Consider a firm uses two inputs X and Y in its production giving the following total cost function:

TC = 3X2 + 6Y2 - XY

(a) Determine the least-cost combination of X and Y to produce 20 units of output using the Lagrangian multiplier

(b) Calculate the value of the Lagrangian multiplier , .

(c) Elucidate the practical significance, or meaning, of the Lagrangian multiplier .

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