Suppose that the finance department of our favorite company, cost of producing amount of televisions is C(x) = 500 + 2x. The marketing department's estimate of the demand function for televisions has not changed and remains p = 10 -0.01x. A) Write an equation for the profit of this company. B) Use the first derivative to find the marginal profit of the function you wrote in part A. C) Compute the second derivative and determine if the value you found in Part B is an absolute maximum or absolute minimum.

Suppose that the finance department of our favorite company, cost of producing amount of televisions is C(x) = 500 + 2x. The marketing department's estimate of the demand function for televisions has not changed and remains p = 10 -0.01x. A) Write an equation for the profit of this company. B) Use the first derivative to find the marginal profit of the function you wrote in part A. C) Compute the second derivative and determine if the value you found in Part B is an absolute maximum or absolute minimum.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the finance department of our favorite company, TVZ R US, determines that the total
= 500+ 2x. The marketing department's
cost of producing a amount of televisions is C (x)
estimate of the demand function for televisions has not changed and remains p = 10 -0.01x.
A) Write an equation for the profit of this company.
B) Use the first derivative to find the marginal profit of the function you wrote in part A.
C) Compute the second derivative and determine if the value you found in Part B is an absolute
maximum or absolute minimum.
D) Find the maximum profit of the company.
E) At what price are profits maximized?

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Step 3: Define marginal profit function:

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Step 6: Calculate the price:

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