1. Limited time only! Sign up for a free 30min personal tutor trial with Chegg Tutors
    Dismiss Notice
Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Homework Help: Profit Maximization

  1. Dec 11, 2007 #1
    1. The problem statement, all variables and given/known data

    Find the level of production x that will maximize profit.

    2. Relevant equations

    C(x) = 500 + 100x^2 + x^3, where x = units produced.

    R(x) = 7000x - 80x^2

    3. The attempt at a solution

    Should I use marginal cost and marginal revenue, or is there a way to just use the equations directly to find the profit maximization?
  2. jcsd
  3. Dec 11, 2007 #2


    User Avatar
    Science Advisor
    Homework Helper

    Profit = R - C. x* maximizes Profit if Profit'(x*) = 0 and Profit"(x*) < 0.

    If you think about it it should be clear that MR = MC amounts to the same first order condition as above.
    Last edited: Dec 11, 2007
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook