Question

Eric provides cheese (H) and milk (M) to the market with the following total cost function: C(H, M) = 10 + 0.4H2 + 0.2M2. The prices of cheese and milk in the market are $2 and $5 respectively. Assume that the cheese and milk markets are perfectly competitive. What output of milk maximizes profits?

Answer 1

Profit maximization cheese output is 2.5 units and profit maximization milk output is 12.5 units .

Step-by-step explanation:

Please see attachment