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

$P\text{ = }\frac{R(q)}{q}=\text{ }\frac{5625}{2500}\text{ = 2.25}$

Therefore

$\text{Price = 2.25 dollars}$

Thus the fixed cost is

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