The average revenue (demand) for product Q is given by AR = 370 - Q and the
Question:
The average revenue (demand) for product Q is given by AR = 370 - Q and the total cost of Q by: STC=10500+10Q+Q^2 < Note: this is not a typical cubic function
f. At what level of Q is revenue maximized? Remember, let MR = 0 and solve for Q. MR = 0 signals the objective of maximizing revenue.
g. At what level of Q is average profit per unit maximized? Hint: the average profit function is the total profit function found in (e) divided by Q. To find the level of Q that maximizes average profit, find the first derivative of average profit, set this derivative equal to zero and solve for Q.
h. What price per unit should be charged at the quantity found in (g)? Simply plug the Q you got in (g) into the same price function you found in (a) and also used in (d).
Expert Answer:
Analyzing Revenue and Profit We are given the Average Revenue AR and ShortRun Total Cost STC functio... View the full answer
