Suppose we know that p=1,056- D/5, where p: price in dollars and D = annual demand. The total cost per year can be approximated by $1,000 + 2D². a. Determine the value of D that maximizes profit. b.Show that in part(a) profit has been maximized rather than minimized. c. Find the maximum profit

Suppose we know that p=1,056- D/5, where p: price in dollars and D = annual demand. The total cost per year can be approximated by $1,000 + 2D². a. Determine the value of D that maximizes profit. b.Show that in part(a) profit has been maximized rather than minimized. c. Find the maximum profit

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2.2CE

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Question

Suppose we know that p=1,056- D/5, where p:
price in dollars and D = annual demand. The total
cost per year can be approximated by $1,000 +
2D².
a. Determine the value of D that maximizes profit.
b.Show that in part(a) profit has been maximized
rather than minimized.
c. Find the maximum profit

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