Question

A) At approximately what production level, q, is profit maximized? B) What is the price of the productC) What are the fixed costs

Answer 1

From the given table ,

`\begin{gathered} \text{Profit = }Revenue\text{ - Cost} \\ \end{gathered}`

Profit is maximum at

`5625-4752.75\text{ = 872.25}`

Therefore ,

`q\text{ = 2500 units }`

Price of the product is

`P\text{ = }(R(q))/(q)=\text{ }(5625)/(2500)\text{ = 2.25}`

Therefore

`\text{Price = 2.25 dollars}`

Thus the fixed cost is

`C(0)\text{ = }3000\text{ dollars}`