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What is the cost-minimizing allocation of the production

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Woozles can be manufactured in either of two types of factory with the following cost functions. A perfectly competitive manufacturer of woozles currently has two factories, one of each type:

C1 = 0.2q12 + 5.2q1 + 25

C2 = q22 + q2 + 9.8

where Ci = total cost function for type i factory, i = 1, 2.

qi = production of type i factory, i = 1, 2.

Question (a) Market price for woozles is currently 4. What is the profit-maximizing (loss-minimizing) production from each factory?

Question (b) The manufacturer wants to produce 16.5 woozles. What is the cost-minimizing allocation of this production between the two factories?

Reference no: EM132603714

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