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The price of a product in a competitive market is $200. If the cost per unit...

The price of a product in a competitive market is $200. If the cost per unit of producing the product is 80 + 0.1x dollars, where x is the number of units produced per month, how many units should the firm produce and sell to maximize its profit?

Expert Solution

The price of a product in a competitive market is $200.

Revenue is given by

Cost per unit of producing the product is dollars, where x is the number of units produced per month.

Cost is given by

Profit function is given by

When profit is maximum,

That is

For maximum profit, 600 units should be produced.

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milcah answered 2 years ago

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