Two CPA students were discussing the relationship between average cost and total cost. One student saidthat since average cost is obtained by dividing the cost function by the number of units Q, it follows that the derivative of the average cost is the same as marginal cost, since the derivative of Q is 1.Required:Comment on this analysis.
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Demand function for a firm is given byP=12 - 0.4QP is the price of the product, Q is the quantity demanded, and the total cost (C) is given byC = 5 + 4Q + 0.6Q2At what price and quantity will the firm have maximum profit? If the firm aims at maximizing sales, whatprice should it charge?
Date posted: December 6, 2018. Answers (1)
A company is selling an item for ps= Sh.5. Profit is related to selling price p byP=50000ps - 6250ps2i ) Is the profit an increasing function or a decreasing function when ps = 5?ii) If the price is changed to Sh.4.75, find whether profit would increase or decrease and find the change inprofit.iii) At what price is the profit maximized?
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