Question
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.)
equations 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.
(A) The maximum revenue is
(Type an integer or a decimal.)
(B) The maximum profit is
(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.
(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:
-
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. -
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:
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.
(B) The maximum profit is $51750 when 1950 sets are manufactured and sold for $135 each.