The demand equation for Widgets can be assumed to be P - 1, 350 - 150 where Pis the price per unit and Q is the integer number of Widgets sold. The factory for Widgets has annual fixed costs amounting to P11.200,000. Each Widget has a manufacturing cost of P750. Determine the maximum profit possible. 1) How many Widgets should be sold to maximize profit? 2) What should be the price to maximize profit? (Hint 1: you need algebra and calculus) (Hint 2: how do you determine maxima given a quadratic equation?)
The demand equation for Widgets can be assumed to be P - 1, 350 - 150 where Pis the price per unit and Q is the integer number of Widgets sold. The factory for Widgets has annual fixed costs amounting to P11.200,000. Each Widget has a manufacturing cost of P750. Determine the maximum profit possible. 1) How many Widgets should be sold to maximize profit? 2) What should be the price to maximize profit? (Hint 1: you need algebra and calculus) (Hint 2: how do you determine maxima given a quadratic equation?)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The demand equation for Widgets can be assumed to be
P - 1, 350 -
where Pis the price per unit and Q is the integer number of Widgets sold. The factory for Widgets has annual fixed costs amounting to
150
P11,200,000. Each Widget has a manufacturing cost of P750. Determine the maximum profit possible.
1) How many Widgets should be sold to maximize profit?
2) What should be the price to maximize profit?
(Hint 1: you need algebra and calculus)
(Hint 2: how do you determine maxima given a quadratic equation?)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6c24f64-ba66-43ee-aac1-e722551085b8%2Fe08d6811-8439-4738-927f-8a69ff6bc7ba%2Fidbnbk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The demand equation for Widgets can be assumed to be
P - 1, 350 -
where Pis the price per unit and Q is the integer number of Widgets sold. The factory for Widgets has annual fixed costs amounting to
150
P11,200,000. Each Widget has a manufacturing cost of P750. Determine the maximum profit possible.
1) How many Widgets should be sold to maximize profit?
2) What should be the price to maximize profit?
(Hint 1: you need algebra and calculus)
(Hint 2: how do you determine maxima given a quadratic equation?)
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