Question

company is producing two items a and b jointly in fixed propotion of 1:1 the following indicate their market demand functions QA : 700 - 100 pa and QB 500-200 pa the MC of the join operations is constant at rs 2 per unit what qunty of a and b will company produce for optimum profits?will the company need to store ini inventory at least one of the items or both items support your ans with calculations

Answer 1

Q A 7 Pa 500-00) TA Amwen 700 - 100 Pa PA 7 -7,4400 – On) OB 500 - 200 PB I 200 M@ = 2 27 TC 20 (if we assumefixed ixed cost -0) - T8, -10, profit of PAXO - TO Too QA) * Qu – 2 Q4 -2 50 2.50 I And 50 Scanned by TapScanner A ATTA ODA = 0 t A g 1/ QA 7 Q

Similarly for By TB TRB - TOB Proo 20 B -IQ B 200 88 Q a dito do. eles B 100 . 7 áhom = 1605.00 50 | (And roduce amounts I really the company should prod equal both gA and a but since me aw that ga i produced 200 unito more than PBI BA of B units should be stored in inventory for further use Scanned by TapScanner