Question: The demand function of a good is given by Q = 1000e0.2 P If fi xed costs are 100 and the variable costs are 2

The demand function of a good is given by

Q = 1000e0.2 P

If fi xed costs are 100 and the variable costs are 2 per unit, show that the profi t function

is given by

= 1000 P e0.2 P 2000e 0.2 P 100

Find the price needed to maximise profi t.

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