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In: Economics

A firm produces two products, the respective quantities of which are ?1 and ?2. The firm...

A firm produces two products, the respective quantities of which
are ?1 and ?2. The firm has agreed to produce a total of 100 units of
both products for a client. The total cost TC for the firm is
??(?1, ?2) = 2?1 + ?1?2 + 4?2
with demand functions ?1 = 20 − ?1 + ?2 and ?2 = 30 + 2?1 − ?2.
Show that the firm’s maximum profit is 2,204, where profit is
?(?1, ?2) = ?1?1 + ?2?2 − ??(?1, ?2)

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Expert Solution

Rahul Sunny answered 1 year ago
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