The total cost and total revenue functions for a product are - 68174

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  • From: Mathematics, Algebra
  • Posted on: Tue 01 Jul, 2014
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Request Description

The total cost and total revenue functions for a product are 

C(q) = 5,000,000 + 250q + 0.002q^2 and R(q) = 1,250q - 0.005q^2 

a) Using the marginal approach, determine the profit-maximizing level of output (q*). 

b) What is the maximum profit?

Solution Description

The Pro?t Function (P)

P(x) = R(x) −C(x)

P(x) = 1250q - .005 q2 -5000000 – 250 q -.002 q2     ---------  (1)

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S_003.doc