Kevin P.

Guinsisana BA 245- Managerial Economics

MBA- 2nd Year Professor: Dr. Marlon A. Mojica

1. A firm’s total profit is given by π=20 x−x 2 +16 y−2 y 2.

1.1. What values of x and y will maximize the firm’s profit?

Answer:

Rearrange the equation:

π = -(x-10)² - 2 (y-4)² + 132

Given the fact that a perfect square under real number system is always nonnegative,

x=10 and y=4.

The maximum profit is 132.

1.2. What values of x and y will maximize profit if the firm faces the constraint
x+y=8?

Answer:

Δƒ= χΔ9x -4x+ 40= 8

-2x+ 20= λ -4x+ -32

-2y+ 16= λ x= 8

-2x+ 20= x=y=8

(-2x+20) + (-2x+20) = 8
 1.3. What values of x and y will maximize profit if the firm faces the constraint
x+0.5y=7.5?

Answer:

-2x+20= λ

-2y+16/0.5= λ

(-2y+16/0.5) + (-2y+16/0.5)= 7.5

x=y= 7.53125

1.4. Repeat 1.2 using Solver.

Answer:

1.5. Repeat 1.3 using Solver.

Answer:
 1.6. Use Solver to solve Z=x2+2xy+yw2, subject to 2x+y+w2=24 and x+w=8.

Answer: