3. Suppose that the revenue in selling x tables is equal to 200x - 0.25x² dollars, and producing a table costs 50 dollars each. If the overhead cost of producing the tables is 2,000 dollars, at what production level will the profit be maximized?

3. Suppose that the revenue in selling x tables is equal to 200x - 0.25x² dollars, and producing a table costs 50 dollars each. If the overhead cost of producing the tables is 2,000 dollars, at what production level will the profit be maximized?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

3. Suppose that the revenue in selling x tables is equal to 200x 0.25x² dollars, and producing
a table costs 50 dollars each. If the overhead cost of producing the tables is 2,000 dollars, at
what production level will the profit be maximized?

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