Solve The following problems in your Work Book

1. A firm faces a demand law q = 50-4p where q and p are the quantity and prices of the
good respectively. Find out the price at which total revenue is maximized.
2. A manufacturer in a monopolistically competitive industry produces two different brands of a
product for which the demand functions are P1=56-4Q1 and P2=48-2Q2. and the joint cost
function is

TC=Q12+5Q1Q2+Q22. Find the profit maximizing level of output and the price that should be
charged for each brand.
3. A transport company plans to ferry tourists between Delhi and Simla. It has its cost
function estimated as given below:
TC = 100 + 50N + 4N2
where N denotes number of passengers per day.
Find (a) the average function; (b) number of passengers per day that minimizes the average
cost.
3. Suppose a firm has its TR and TC functions estimated as follows:
TR = 300Q-3Q2
TC = 500 + 50Q + 2Q2
Find (a) profit function of the firm, (b) the quantity of output (Q) that maximizes the
firm's profit.

4. A company produces two goods X and Y. The profit function of the company is given as
follows:
P = I00X- 2X2 - XY + 180Y – 4Y2
The company is under obligation to produce a minimum combined output of 30 units. Find the
output of X and Y subject to a total of 30 units that maximize total profit by using Lagrangian
multiplier methods.
5. Suppose that the manager of a firm is planning to meet an order of 1000 units of two products
X and Y. The manager's problem is to find the combination of two goods that minimize its cost.
He has the firm's cost function of two goods estimated as
C = 5X2 + 20 Y2
By using the Lagrangian multiplier method, find the quantity of X and quantity of Y, subject to X
+ Y = 1000, that minimize the cost of meeting the order.

6. Find the maximum and minimum values of the following functions

a) 3X4 -X3 +2
b) x4 – 14x2 +24x +9

Q
7. Find the profit maximizing output given Q = 200 – 10p and AC = 10 + where Q is
25
quantity, p is price and AC is average cost.

8. Find the first order and second order partial derivatives of the following function
a) Z = 2x3 +5 x2y +xy2 +y3
b) Z = log (x2 + y2)

9. Find elasticity of demand if demand function is x = 250 – 5p +p2. Also find elasticity of
demand at p = 8
10. Find elasticity of demand if demand function is p = 50 – 3q. Also find elasticity of demand
at p = 5