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The Diversified Vegetable Company grows two crops, tomatoes and zucchini. The firm is a price-taking seller....

The Diversified Vegetable Company grows two crops, tomatoes and zucchini. The firm is a price-taking seller. The price of a bushel of tomatoes is $20, while the price of a bushel of zucchini is $30. The firm uses the same land and the same workers to raise the two crops, and its total cost for the two crops is 5XT2 + 6XZ2 + XTXZ, where XT and XZ are the respective quantities of tomatoes and zucchini.

Find the following

A) The profit maximizing level of production of tomatoes and zucchini.

B) The maximized profits.

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Answer #1

Method;

We use formula : Profit = Total revenue - Total Cost

Then we used calculus (First order condition) to calculate optimal amount of Zucchini and Tomato.

In part (B) we put the quantities calculated in part (A) into Profit equation and calculated maximum Profit

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