The annual profit for the firm depends upon the number of units produced. Specifically the function which describes the relationship between profit P (stated in dollars) and the number of units produced x is
P=-0.01x^2+5000x-25000
a) Determine the number of units x which will result in maximum profit.
b) What is the expected maximum profit?
Given that
Then we have that
So when
We have that
So the answer to question (a) is that 250000 will result in the maximum profit
b) So we substitute the value of into
So we have that
The expected maximum profit is 624975000
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