A Firm Produces Two Products, X and Y, and the Production

question 23

Multiple Choice

A firm produces two products, x and y, and the production process is such that one unit of x is always obtained with one unit of y. If the demand for x and y are estimated to be:
Q_x = 100 - P_x so that MR_x = 100 - 2Q_x)
Q_y = 220 - P_y so that MR_y = 220 - 2Q_y)
And the marginal cost of production is MC = 50 + .5Q_j, where Q_j consists of one unit of each product, how much of product x should the firm sell in order to maximize profit?

• A) 30
• B) 40
• C) 50
• D) 60
• E) 70

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Definitions:

January

The first month of the year in the Gregorian calendar.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead expenses expected for the actual level of production activity.

January

January is the first month of the year in the Gregorian calendar, often associated with new beginnings and resolutions.

Variable Overhead Efficiency Variance

The difference between the standard cost of variable overheads based on expected efficiency and the actual variable overheads incurred.