solution

The Hassman Company produces two joint products, X and Y. The isocost

curve corresponding to a total cost of $500,000 is QY = 1,000 – 10QX – 5Q 2

X where QY is the quantity of product Y produced by the firm and QX is the

quantity of product X produced. The price of product X is 50 times that of

product Y. a. If the optimal output combination lies on this isocost curve, what is the

optimal output of product X? b. What is the optimal output of product Y?

c. Can you be sure that the optimal output combination lies on this isocost

curve? Why or why not?