The total cost C(q) of producing q goods is given by the following equation.
C(q) = 0.01q3 - 0.6q2 + 13q
(a) What is the fixed cost?
(b) What is the maximum profit if each item is sold for $7? (Assume you sell everything you produce.)
(c) Suppose exactly 34 goods are produced. They all sell when the price is $7 each, but for each $1 increase in price, 2 fewer goods are sold. Should the price be increased or decreased in order to maximize the profit?
(d) By how much should the price be increased or decreased?
Hmm, not sure what to do really. Is the fixed cost just q=1 for the original equation?
(a) I would have thought that the fixed cost is the cost you incur regardless of how many things you make, that is, you substitute q = 0.
Originally Posted by Latszer
(b) Profit: P = 7q - C. So start by solving dP/dq = 0.