Question

If

Answer 1

Since profit can't be negative, the production level that'll maximize profit is approximately equal to 220.

How to find the production level that'll maximize profit?

The cost function, C(x) is given by 12000 + 400x − 2.6x² + 0.004x³ while the demand function, P(x) is given by 1600 − 8x.

Next, we would differentiate the cost function, C(x) to derive the marginal cost:

C(x) = 12000 + 400x − 2.6x² + 0.004x³

C'(x) = 400 − 5.2x + 0.012x².

Also, revenue, R(x) = x × P(x)

Revenue, R(x) = x(1600 − 8x)

Revenue, R(x) = 1600x − 8x²

Next, we would differentiate the revenue function to derive the marginal revenue:

R'(x) = 1600 - 8x

At maximum profit, the marginal revenue is equal to the marginal cost:

1600 - 8x = 400 − 5.2x + 0.012x

1600 - 8x - 400 + 5.2x - 0.012x² = 0

1200 - 2.8x - 0.012x² = 0

0.012x² + 2.8x - 1200 = 0

Solving by using the quadratic equation, we have:

x = 220.40 or x = -453.73.

Since profit can't be negative, the production level that'll maximize profit is approximately equal to 220.

Read more on maximized profit here: brainly.com/question/13800671

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