Question
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A company manufactures and sells television sets per month. The monthly cost and price-demand
equations are and .
(A) Find the maximum revenue.
(B) Find the maximum profit, the production level that will realize the maximum profit, and the price the
company should charge for each television set.
(A) The maximum revenue is
(Type an integer or a decimal.)
(B) The maximum profit is when sets are manufactured and sold for each
(Type integers or decimals.)

Ask by Ramos Hodges. in the United States
Mar 24,2025

Upstudy AI Solution

Tutor-Verified Answer

Answer

(A) The maximum revenue is $300,000.
(B) The maximum profit is $51,750 when 1950 sets are manufactured and sold for $135 each.

Solution

Alright, I need to solve this problem involving a company that manufactures and sells television sets per month. The given equations are the cost function and the price-demand equation , with . The questions are:
(A) Find the maximum revenue.
(B) Find the maximum profit, the production level that will realize the maximum profit, and the price the company should charge for each television set.
First, let’s recall some fundamental concepts:
  1. Revenue ( ): This is the total income from selling units. It’s calculated as the product of the number of units sold and the price per unit.
  2. Profit ( ): This is the difference between the revenue and the total cost.
Given the equations:
Part (A): Maximum Revenue
To find the maximum revenue, I need to determine the value of that maximizes . Since , and is a linear function, will also be a quadratic function.
Let’s express in terms of :
This is a quadratic equation in the form . The coefficient of is negative, which means the parabola opens downward, and the vertex of this parabola will give the maximum revenue.
The vertex of a parabola is at . Here, and .
So, the maximum revenue occurs when television sets are sold.
Now, let’s calculate the maximum revenue:
Part (B): Maximum Profit
To find the maximum profit, I need to determine the value of that maximizes . Let’s express in terms of :
This is another quadratic equation in the form . Again, the coefficient of is negative, so the parabola opens downward, and the vertex will give the maximum profit.
Using the vertex formula:
So, the maximum profit occurs when television sets are sold.
Now, let’s calculate the maximum profit:
Price per Television Set:
To find the price the company should charge for each television set when producing 1950 units, we use the price-demand equation:
Summary:
  • Maximum Revenue: $300,000 when 3000 television sets are sold.
  • Maximum Profit: $51,750 when 1950 television sets are manufactured and sold at $135 each.

Answered by UpStudy AI and reviewed by a Professional Tutor

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Beyond the Answer

To solve the problem, we need to find both maximum revenue (part A) and maximum profit (part B) based on the given equations.
(A) Maximum Revenue:
The revenue can be calculated using the formula:
To find the maximum revenue, we need to find the vertex of this quadratic equation. The vertex of a parabola expressed as occurs at:
Here, and :
Now, substitute back into the revenue function:
So, the maximum revenue is .
(B) Maximum Profit:
To find maximum profit, we first need the profit function , which is given by:
Now substituting the equations:
Simplifying gives:
To find the maximum profit, we again look for the vertex. Here, and :
Now substitute back into the profit function:
Calculating :
The price should be charged as:
Therefore, the answers are:
(A) The maximum revenue is $570000.
(B) The maximum profit is $51750 when 1950 sets are manufactured and sold for $135 each.

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