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 Mullins Warner. in the United States
Mar 24,2025

Upstudy AI Solution

Tutor-Verified Answer

Answer

(A) Maximum Revenue: $300,000
(B) Maximum Profit: $51,750 when 1,950 sets are manufactured and sold at $135 each.

Solution

(A) Maximum Revenue
  1. The revenue function is given by:
  2. This is a quadratic function in with a negative coefficient for (i.e. ), so its graph is a downward-opening parabola. The maximum revenue occurs at the vertex.
  3. The vertex for a quadratic is at:
    Here, and . Therefore:
  4. Substitute into :
    Thus, the maximum revenue is .
(B) Maximum Profit
  1. The cost function is:
    and the revenue function is:
    The profit function is:
  2. Simplify the profit function:
    or rewritten as:
  3. This is again a quadratic function in with and . Its maximum occurs at:
  4. Substitute into to determine the maximum profit:
    First, calculate :
    Next, compute :
    Then, divide by 30:
    Now, substitute back:
    Thus, the maximum profit is .
  5. To find the price per television set when , use the demand equation:
    Substitute :
    Therefore, the company should charge for each television set.
Final Answers:
  • (A) Maximum revenue: .
  • (B) Maximum profit: when sets are manufactured and sold at each.

Answered by UpStudy AI and reviewed by a Professional Tutor

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Explain
Simplify this solution

The Deep Dive

To begin with, we need to derive the revenue function from the price-demand equation. The revenue is given by:
To find the maximum revenue, we will take the derivative of the revenue function and set it to zero:
Setting the derivative equal to zero:
Now we calculate the maximum revenue:
So, the maximum revenue is .
Now for the profit function :
To find the maximum profit, we take the derivative of the profit function:
Setting this to zero:
Next, we compute the maximum profit:
To find the price per television set when 1950 sets are sold:
Putting everything together:
(A) The maximum revenue is .
(B) The maximum profit is when sets are manufactured and sold for each.

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