ECO201: Mathematics for Business and Economics, Spring 2016

Assignment 1; Total marks 20

Date of Submission: 22.03.16

Question No 1:
Given the following Total Cost and Quantity functions solve for the profit maximizing level of output and
show whether the profit is maximized or not. (5)

1 3
Q 7Q 2 111Q 50
3
Q 100 P
( H int : TR P * Q and we need to consider an indirect demand function)

TC

Question No 2:
Given, total revenue R 4000Q 33Q 2 and total cost C 2Q 3 3Q 2 400Q 5000 , find the profit
maximizing level of output and comment whether the function is at its relative maximum or minimum. Find
the maximum profit. (5)

Question No 3:
For each of the following functions, find the critical points at which the function may be optimized and
determine whether at these points the function is maximized or minimized or is at inflection or saddle
point. (5+5)
a.

Z 48 y 3 x 2 6 xy 2 y 2 72 x

b.

f ( x, y ) 5 x 2 3 y 2 30 x 7 y 4 xy