Question: 7 . In a given week, a store sells 1 0 0 tablets at ( $ 1 2 0 ) each. A
In a given week, a store sells tablets at $ each. A quick market survey indicates that for each $ rebate offered to buyers, the number of units sold increases by
a Assuming a linear demand function ppx where x is the number of units sold and px is the unit sale price at sales level x write the formula for px
b Write the formula for the revenue function RRx
c Assume now that the cost of selling x tablets consists of a fixed cost C of $ and a variable cost based on an acquisition cost of $ per tablet. Write the formula for the total cost function CCx
d Write the formula for the profit function PPx and graph it on the interval What kind of curve do you see? Identify its x intercepts and both coordinates of its peak. Hint: You can use GeoGebra to graph the function and inspect it
e Determine the marginal profit. Set the marginal profit to zero and solve for x Reconcile your answer with d above and explain.
f What is the average profit per unit when the profit is maximized?
g Is the maximum average profit per unit the same as the average profit per unit at maximal profit? Yes or No Justify your answer.
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