Question: An electromechanical machine manufacturer has a demand function for his machines: P(q) = 5,500 - 20q, where P represents Selling Price in $ and

An electromechanical machine manufacturer has a demand function for his machines: P(q)

An electromechanical machine manufacturer has a demand function for his machines: P(q) = 5,500 - 20q, where "P" represents Selling Price in $ and "q" represents number of machines sold in a given period. Additionally, it is known that Cost Function is given by: C(q) = 500q + 5q a) How many machines must be sold in a period to obtain a profit of $500,000? b) How many machines must be sold to obtain a MAXIMUM profit per period and what would be MAXIMUM revenue achieved?

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a To obtain a profit of 500000 the manufacturer must sell q 25000 machines This can be determi... View full answer

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