Solutions Economics

Your plant produces two things on the same production line, goods a and b. So, you can alter the pro

Question: Your plant produces two things on the same production line, goods a and b. So, you can alter the production line to make more or less of each. You can sell these items on the open market: Pa = $50 and Pb = $40. Your cost function is as follows.

\[C=500-10a+0.5{{a}^{2}}-5b+{{b}^{2}}-ab\]

How much a and how much b should you produce and what are your profits? (12 pts.)

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Solution: The solution file consists of 2 pages
Deliverables: Word Document


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