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April 16, 2014

Homework Help: Managerial economics

Posted by Patrick on Saturday, September 22, 2007 at 5:25pm.

Suppose Nick produces to goods @ cost
C(q1,q2)=1000=.5q1^2+.5q2^2->5q1q2
If nick produces only one of he two goods his cost is given this cost function with the other good set = to 0.
The inverse demand functions for the two goods are given by
p1=a-.25q1 and p2=A-.05q2 a=17 A=10
How much more of good one does nick produce to maximize profits when he optimally produces both goods than when he produces only one?


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