A friend of mine is an artist. She mostly paints landscape pictures. They take a bit of time, but are generally worth it. She can paint as many as 100 per year. The total cost is , C(X) = 10 + 0.5x + 0.01x^2 where x is the number of paintings. I am told that the demand for her paintings is given by Q(P) = 100 – .01P, where P is the price in dollars for painting. Question: How many paintings would minimize the unit cost of production and what would the cost be?

A friend of mine is an artist. She mostly paints landscape pictures. They take a bit of time, but are generally worth it. She can paint as many as 100 per year. The total cost is , C(X) = 10 + 0.5x + 0.01x^2 where x is the number of paintings. I am told that the demand for her paintings is given by Q(P) = 100 – .01P, where P is the price in dollars for painting. Question: How many paintings would minimize the unit cost of production and what would the cost be?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter18: Auctions

Section: Chapter Questions

Problem 18.6IP

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