Maximization in the

Two-Input Case
 The Maximum of a
Function: first-order
General production function
y = f(x1, x2)
The first-order or necessary conditions for
the maximization of output are:
y/ x1 = 0, or f1 = 0(1)
and y/ x2 = 0 or f2 = 0..(2)
Equations (1) & (2)ensure that the point is
level relative to both the x1 and the x2
axes.
 Second partial derivatives

These four second partial derivatives are:

(y/ x1)/ x1= 2y/x12 = f11
(y/ x1)/ x2= 2y/x1x2= f12
(y/ x2)/ x1= 2y/x2 x1 = f21
(y/ x2)/ x2= 2y/x22 = f22

The second order conditions for a maximum

require that
f11 < 0 and f11f22 > f12f21.
 Some examples
Example 1:
y = 10x1 +10x2-x12-x22
 Example 2:
y = -10x1-10x2+x12+x22
Example 3:
y = 10x1-10x2-x12+x22