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ECO404 Assignment No 01 Solution & Discussion Due Date: Nov 22, 2016

ECO404 - Managerial Economics Assignment No. 1 Solution Fall 2016 Due Date: Nov 22, 2016















Nestle Pakistan is one of the leading food and beverage companies in Pakistan with key focus on nutrition, health and wellness. The top priority of the company is to produce good quality and safely products with environment friendly operations. Different brands of the company include ambient dairy, coffee, bottled water, juices, baby food and breakfast cereals. Let the profit function of Nestle Pakistan is given as under

π = 60x – 3x2  –xy – 3y2  + 200y

Subject to the following constraint:

x + y = 14







Keeping in view the above information, use the Lagrangian Multiplier method to calculate:




  1.  Profit maximizing values of input “x” 
  2.  Profit maximizing values of input “y”
  3.  The Lagrangian Multiplier “λ”. Also interpret it.




(Marks: 3+3+4)

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Replies to This Discussion

Plz upload complete answer....kuch samagh nahe aa raha

dear ap ka ya wrong ha please correct it
– 5X +X + 5Y -140
correct ya ha
– 5X + 5Y -140
hopefully u get correct result

Correct Ans:
X = -7, Y = 21, Lambda = 81

lucky zafar brother....kindly tell how you find the valueof x,y and λ in your following method,actually i dont know the method plz

Solution: X = 7, Y = 7, and λ = 371

Hello #lucky Zafar
Apka solution bilkul sahi hai mene bhi asi hi kara hai...

par last mein λ = 371 ye wrong hai...

∂L/ ∂Y = – X – 6Y + 200 - λ = 0 2 is mein X & Y ki value dale gi or answer 151 aye ga..

notes k page 14 pe dekhlo bilkul ase hi hoa hai

Is ka second part kara hai ?

dear ap ka ya wrong ha please correct it
– 5X +X + 5Y -140
correct ya ha
– 5X + 5Y -140
hopefully u get correct result
Correct Ans:
X = -7, Y = 21, Lambda = 81

bhai apne notes dekhy hai ? page 14 pe ??

g ap ko mistake bati to ha plz check it or send me whattapp no me raf ap ko send kr data hun then discuse kr lain gy

@Faraz: i think you are subtracting equation 1 from equation 2.
dear please note: "Subtract equation 2 from equation 1" to get Equation 4
in this way Signs of equation 2 will change due to the subtraction.
Then you will get: -5X+5Y-140=0

Please confirm.

dear Mohammad Asif plz tell me how to calculate value of x & y...?

ap whatsapp ka no do ya mailing address me ruf work send kr data hun ap ko

dear sarfraz...if X = -7, Y = 21 then by putting these values in ∂L/ ∂Y = – X – 6Y + 200 - λ , we get 
λ= 81.............plz calculate carefully otherwise u will lose mks

Thanks all specially faraz,asif,Jv and lucky zafar

faraz and we will interpret the final question as asked by the examiner.....any idea?


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