Question

Question 1 3 pts Profit Analysis Unendo, is a large computer game manufacturer. DESTINY V They have estimated that the demand function for their game "Destiny 3" is as follows... p = 95 -0.054 where p is the price of a game and q is the number of game produced and sold per week. They estimate that their cost function in dollars is... Cla) = 294 + 5000 where the fixed cost is $5000 and the marginal cost is $29 per game Unendo wishes to maximize the weekly profit of producing and selling the game. Find the number, q, of units that produces maximum profit. (Round your answer to the nearest whole number) HINT: Refer to "Your Turn 5" in Learning Module 10.2 study sheets, pages 11-13

Answer 1

We need to find q i.e number of units to be sold for maximizing profit.

Profit = sales - cost

= Price * quantity- cost

= p*q - c(q)

= (95-0.05q)*q -29q-5000

= 95q - 0.05q^2 - 29q - 5000

= -0.05q^2 + 66q - 5000

dp/dq will be zero when q is maximum.

Hence -0.05*2*q +66 = 0

Q = 66/0.1

= 660 units

So, 660 units have to be sold to get maximum profit