Suppose the joint cost function of a firm producing two products X and Y is given by C = 250X2 + 120Y2. Assuming that output of the two products is restricted at 1480. Using Lagrangian multiplier technique find the amounts of X and Y that will minimize cost and compute this cost. Also examine the cost implications of changing this optimal combination so as to produce equal amounts of both products
Suppose the joint cost function of a firm producing two products X and Y is given by C = 250X2 + 120Y2. Assuming that output of the two products is restricted at 1480. Using Lagrangian multiplier technique find the amounts of X and Y that will minimize cost and compute this cost. Also examine the cost implications of changing this optimal combination so as to produce equal amounts of both products
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
Chapter7: Production Economics
Section: Chapter Questions
Problem 4E
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Suppose the joint cost function of a firm producing two products X and Y is given by C = 250X2 + 120Y2. Assuming that output of the two products is restricted at 1480. Using Lagrangian multiplier technique find the amounts of X and Y that will minimize cost and compute this cost. Also examine the cost implications of changing this optimal combination so as to produce equal amounts of both products
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