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ISBM

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The price P per unit at which a company can sell all that it produces is given by the
function P(x) = 300 — 4x. The cost function is c(x) = 500 + 28x where x is the number
of units produced. Find x so that the profit is maximum.

  • ISBM - ,

    profit = revenue - cost
    revenue = demand * price

    profit is thus x(300-4x) - (500+28x)
    = -4x^2 + 272x - 500

    This a parabola with vertex at (34,4124)

    So, max profit is 4124 when x = 34

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