Suppose That a Manufacturer Produces Two Brands of a Product

question 118

Multiple Choice

Suppose that a manufacturer produces two brands of a product, brand 1 and brand 2. Suppose the demand for brand 1 is thousand units and the demand for brand 2 is thousand units, where p₁ and p₂ prices in dollars. If the joint cost function is , in thousands of dollars, how many of each brand should be produced to maximize profit? ​

• A)74 units of brand 1 82 units of brand 2
• B)9 units of brand 1 52 units of brand 2
• C)74 units of brand 1 52 units of brand 2
• D)14 units of brand 1 38 units of brand 2
• E)27 units of brand 1 77 units of brand 2

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Definitions:

Long-term Goals

Objectives or plans that are intended to be achieved over an extended period, typically exceeding one year.

Fixed Asset

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash within a year.

Useful Life

The period over which an asset is expected to be used by an entity, or its lifespan for accounting purposes.

Residual Value

The estimated value of a fixed asset at the end of its useful life.