Consider a competitive firm that produces two specific goods. The firm's cost function for the two goods is denoted as follows:C (91-92) -3912+3 92²where gj be the quantity of good 1 produced and 92 the quantity of good 2 produced. Assume good 1 is priced at 60 dollars and good 2 is price at 18dollarsFind the quantities produced of each good to maximize the firm's profit. Round to two decimal places, if necessary.91= Number92 NumberWhat is the profit of the firm after producing the ideal amount? Round to two decimal places, if necessaryNumberNow check the second order conditionsThe Hessian issin (a)fOxa 12E The principal minors are H₁absin (a)sin (a)8di0fdrTherefore the Hessian is tfpositive definitenegative definiteindefinite8Click for Lista S2a 52andClick for ListEand H₂ =

The cost function of a firm producing two commodities is given byThe price of first commodity is…

Consider a competitive firm that produces two specific goods. The firm's cost function for the two goods is denoted as follows: C (91-92) = 3912+3 9₂² be the quantity of good 1 produced and 92 the quantity of good 2 produced. Assume good 1 is priced at 60 dollars and good 2 is price at 18. where dollars Find the quantities produced of each good to maximize the firm's profit. Round to two decimal places, if necessary. 91- 92 Number Number What is the profit of the firm after producing the ideal amount? Round to two decimal places, if necessary Number Now check the second order conditions The Hessian is sin (a) Or ⠀⠀⠀ 00 12

Consider a competitive firm that produces two specific goods. The firm's cost function for the two goods is denoted as follows: C (91-92) = 3912+3 9₂² be the quantity of good 1 produced and 92 the quantity of good 2 produced. Assume good 1 is priced at 60 dollars and good 2 is price at 18. where dollars Find the quantities produced of each good to maximize the firm's profit. Round to two decimal places, if necessary. 91- 92 Number Number What is the profit of the firm after producing the ideal amount? Round to two decimal places, if necessary Number Now check the second order conditions The Hessian is sin (a) Or ⠀⠀⠀ 00 12

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 5E

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Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh                 Q1 = 12 – P1 Sri Lanka                     Q2 =   8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) A.Determine the company’s total profit function. Also, (i) What are the profit maximizing levels of price and output for the two markets? (ii) Calculate the marginal revenues in each market. B.Now consider two cases: (i) Company is effectively able to price discriminate in thetwo markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging thesameprice in the two markets what are the profit maximizing levels of price,output, and the total profits?…
Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh                 Q1 = 12 – P1 Sri Lanka                    Q2 =   8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the total profits? (iii) Analyze, with graphs, the two alternative pricing strategies available to the company.