A firm produces two different kinds A and B of a commodity. The daily cost of producing x units of A and y units of B is
C(x,y) = 0.04x2 + 0.01xy + 0.01y2 +4x + 2y +500
Suppose that firm sells all its output at a price per unit of 15 for A and 9 for B.
Find the daily production levels x and y that maximise profit per day.
Suppose that any production by the firm creates pollution, so it is legally restricted to produce a total of 320 units of the two kinds of output. What now are the optimal quantities of the two kinds of output?
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I'd like to add that the '2' after x and y means 'squared'.
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