3. The equation of the monthly demand for cabin bags is given by: 45-p= 0'5q and the monthly average cost function is: Cme(q) = q²-39'50q+120+125, where p ≤ 45 is the unit price and q are the number of units sold. 3.1 What are the price and quantity that maximize the total profit? How much is this profit? 3.2 Calculate the marginal income (revenue) of the 20th unit using marginal income (revenue) and compare it to the actual additional income. 3.3 Calculate the price elasticity of demand for the quantity that maximizes profit and interpret the result obtained.

3. The equation of the monthly demand for cabin bags is given by: 45-p= 0'5q and the monthly average cost function is: Cme(q) = q²-39'50q+120+125, where p ≤ 45 is the unit price and q are the number of units sold. 3.1 What are the price and quantity that maximize the total profit? How much is this profit? 3.2 Calculate the marginal income (revenue) of the 20th unit using marginal income (revenue) and compare it to the actual additional income. 3.3 Calculate the price elasticity of demand for the quantity that maximizes profit and interpret the result obtained.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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