Market research shows that 120 units of a good sell when the price is dollars and 180…
MATHEMATICS · Single correct · AP · Calculus AB · Analytical Applications of Differentiation · Analytical Applications of Differentiation
Problem
Market research shows that 120 units of a good sell when the price is 30 dollars and 180 units sell when the price is 20 dollars. Assuming a linear demand relationship and that production costs are C(q)=5q+1500, what price should the firm charge to maximize profit if it can produce up to 200 units?
(a) 30 dollars
(b) 27.50 dollars
(c) 25 dollars
(d) 32.50 dollars