Answer to Question #202371 in Microeconomics for Ondisa

Question #202371

Given the production function:

 Y = 10 + 5X1 – 0.2 X12

a)  Define the functions for average product and marginal product.

b)  Compute the maximum level of production of Y and the corresponding    level of input X1.

c)        Given the price of Y = R3.75/unit and that of X1 = R1.50/unit, algebraically compute the maximum profit level of input and output.      


1
Expert's answer
2021-06-03T09:12:09-0400

a)


AY=10X1+50.2X1AY=\frac{10}{X_1}+5-0.2X_1

MY=50.4X1MY=5-0.4X_1

b)


50.4X1=05-0.4X_1=0

X1=12.5X_1=12.5

Y=41.25Y=41.25

c)


π=41.25×3.7512.5×1.5=135.94\pi=41.25\times3.75-12.5\times1.5=135.94


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