Q2: Marres limited has the following demand and cost functions
Demand function: P=80-3Q, where P is the unit selling price and Q is quantity in thousands
Cost function: TC=Q2+20Q+100, where TC is total cost in Ksh 000000
Required:
Optimal price to maximize profit (3mks)
Maximum profit (2mks)
Given that:
and
at equilibrium
Then:
in thousand
a) Optimal price to maximize profit:
b) Maximum Profit, =
At
Comments