For Exercises 12, indicate all critical points on the given graphs. Which correspond to local minima, local maxima, global maxima, global minima, or none of these? (Note that the graphs are on closed intervals.)
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Textbook Solutions for Calculus: Single Variable
Question
A manufacturers cost of producing a product is given in Figure 4.120. The manufacturer can sell the product for a price p each (regardless of the quantity sold), so that the total revenue from selling a quantity q is R(q) = pq. (a) The difference (q) = R(q) C(q) is the total profit. For which quantity q0 is the profit a maximum? Mark your answer on a sketch of the graph. (b) What is the relationship between p and C (q0)? Explain your result both graphically and analytically. What does this mean in terms of economics? (Note that p is the slope of the line R(q) = pq. Note also that (q) has a maximum at q = q0, so (q0)=0.) (c) Graph C (q) and p (as a horizontal line) on the same axes. Mark q0 on the q-axis
Solution
The first step in solving 4 problem number 73 trying to solve the problem we have to refer to the textbook question: A manufacturers cost of producing a product is given in Figure 4.120. The manufacturer can sell the product for a price p each (regardless of the quantity sold), so that the total revenue from selling a quantity q is R(q) = pq. (a) The difference (q) = R(q) C(q) is the total profit. For which quantity q0 is the profit a maximum? Mark your answer on a sketch of the graph. (b) What is the relationship between p and C (q0)? Explain your result both graphically and analytically. What does this mean in terms of economics? (Note that p is the slope of the line R(q) = pq. Note also that (q) has a maximum at q = q0, so (q0)=0.) (c) Graph C (q) and p (as a horizontal line) on the same axes. Mark q0 on the q-axis
From the textbook chapter USING THE DERIVATIVE you will find a few key concepts needed to solve this.
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