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Math Help - Maximizing Profit

  1. #1
    Junior Member asemh's Avatar
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    Maximizing Profit

    Hi
    I am having trouble with this question and am not sure if i am doing it right.

    C(x) = 480000 + 2.4x + 0.0008x^2
    p(x) = 4 - 0.001x

    a) What production level will minimize the average cost?
    b) What level of sales will maximize the profits?


    For a), I did A(x) = C(x)/x < Is that correct?
    For b), I did P = p(x)(x) - C(x) < Is that correct?

    Please tell me if I am making a mistake and how i should do it.

    Thanks in advance.
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  2. #2
    Grand Panjandrum
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    Quote Originally Posted by asemh View Post
    Hi
    I am having trouble with this question and am not sure if i am doing it right.

    C(x) = 480000 + 2.4x + 0.0008x^2
    p(x) = 4 - 0.001x

    a) What production level will minimize the average cost?
    b) What level of sales will maximize the profits?


    For a), I did A(x) = C(x)/x < Is that correct?
    For b), I did P = p(x)(x) - C(x) < Is that correct?

    Please tell me if I am making a mistake and how i should do it.

    Thanks in advance.
    Try explaining your notation and what you are doing at each stage.

    CB
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  3. #3
    Junior Member asemh's Avatar
    Joined
    Mar 2010
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    For a)
    I am taking the Cost Function and dividing it by "x", since they want the average.

    For b) I am taking the p(x) Function multiplied by "x" - Cost Function

    Is what im doing the correct thing? If not how would i do it?
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