In the analysis in the text of products that are substitutes in production we used the example of Surefire Products, a firm that produced two goods, X and Y, with the same production facility. The inverse demand and marginal revenue for X were
P X = 120 - 2Q X and MR X = 120 - 4Q X
and for Y were
P Y = 60 - 1.5Q Y and MR Y = 60 -3Q Y
One hour on the production facility could produce 2 units of X or 4 units of Y
Q X = 2H X and Q Y = 4H Y
Thus the marginal revenue product functions were
MRP X = 240 - 16H X and MRP Y = 240 - 48H X
so the horizontal summation yielded the total marginal revenue product function
MRP T = 240 -12H T
Now let the new marginal cost function be
MC = 58 + 2H T
-What is the profit-maximizing number of hours to use the production facility? The firm should use ______ hours to produce X and ______ hours to produce Y.

Question

In the analysis in the text of products that are substitutes in production we used the example of Surefire Products, a firm that produced two goods, X and Y, with the same production facility. The inverse demand and marginal revenue for X were 
P X = 120 - 2Q X and MR X = 120 - 4Q X 
and for Y were
P Y = 60 - 1.5Q Y and MR Y = 60 -3Q Y 
One hour on the production facility could produce 2 units of X or 4 units of Y
Q X = 2H X and Q Y = 4H Y 
Thus the marginal revenue product functions were
MRP X = 240 - 16H X and MRP Y = 240 - 48H X 
so the horizontal summation yielded the total marginal revenue product function
MRP T = 240 -12H T 
Now let the new marginal cost function be
MC = 58 + 2H T 
-What is the profit-maximizing number of hours to use the production facility? The firm should use ______ hours to produce X and ______ hours to produce Y.

Quizplus · Accepted Answer

The Answer of In the analysis in the text of products that are substitutes in production we used the example of Surefire Products, a firm that produced two goods, X and Y, with the same production facility. The inverse demand and marginal revenue for X were 
P X = 120 - 2Q X and MR X = 120 - 4Q X 
and for Y were
P Y = 60 - 1.5Q Y and MR Y = 60 -3Q Y 
One hour on the production facility could produce 2 units of X or 4 units of Y
Q X = 2H X and Q Y = 4H Y 
Thus the marginal revenue product functions were
MRP X = 240 - 16H X and MRP Y = 240 - 48H X 
so the horizontal summation yielded the total marginal revenue product function
MRP T = 240 -12H T 
Now let the new marginal cost function be
MC = 58 + 2H T 
-What is the profit-maximizing number of hours to use the production facility? The firm should use ______ hours to produce X and ______ hours to produce Y.

In the Analysis in the Text of Products That Are