Lukanga Water has been providing water services in the Central Province for more than 20 years. Business analysts estimated the demand for water is P 40 - 5Q. where Q is the number of clients served (in thousands) and P is the price charged (in millions of Kwacha). Lukanga Water total costs are determined as TC = 10 - 0.75Q. (a) How much is the profit maximizing level of output? (b) How much is Price at profit maximizing level of output? (c) Calculate the Profit level.

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Lukanga Water has been providing water services in the Central Province for more than 20 years.
Business analysts estimated the demand for water is P 40- 5Q, where Q is the number of clients
served (in thousands) and P is the price charged (in millions of Kwacha). Lukanga Water total costs are
determined as TC = 10 - 0.75Q.
(a) How much is the profit maximizing level of output?
(b) How much is Price at profit maximizing level of output?
(c) Calculate the Profit level.
Transcribed Image Text:Lukanga Water has been providing water services in the Central Province for more than 20 years. Business analysts estimated the demand for water is P 40- 5Q, where Q is the number of clients served (in thousands) and P is the price charged (in millions of Kwacha). Lukanga Water total costs are determined as TC = 10 - 0.75Q. (a) How much is the profit maximizing level of output? (b) How much is Price at profit maximizing level of output? (c) Calculate the Profit level.
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