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m119+q7+spr2010+key

# m119+q7+spr2010+key - MR is the derivative of the Revenue...

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M119 Quiz 7 Spring 2010 KEY No graphing calculators . A company finds that the demand equation for a quantity q of Jphones sold at price p, in dollars is p = 290-3q. To product these Jphones, the company finds that fixed costs are \$1975 and variable cost per unit is \$74. a. (2 pts) Write the revenue function. So, b. (2 pts) Write the cost function. C = Fixed costs + Variable costs So, , c. (4 pts) At what quantity is profit maximized? Show your work. Profit is maximized where marginal revenue equals marginal cost.
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Unformatted text preview: MR is the derivative of the Revenue function MR = 290 – 6q MC is the derivative of the Cost function MC = 74 Set 290 – 6q equal to 74 and solve for q 290 – 6q = 74 216 = 6q q = 36 d. (2 pts) What is the largest profit possible? When q = 36, total Revenue is 290(36) – 3(36) 2 When q = 36 total Cost is 1975 + 74(36) = \$4,639 = \$6,552 So, when q = 36, Profit = \$6,552 - \$4,639 = \$1,913...
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