Finding profit function for revenue and cost functions

Assignment Help Basic Statistics

Reference no: EM1323312

Q1) "Investment" (zero cost) has 80% chance of paying $125 and a 20% chance of losing $375. I understand that expected payout is (.8x$125)-(.2x$375)=$25. I can make this "investment" every month. Or we can say, how much money do I need to have say 98% probability of not going broke and being able to reap expected long them expected pay-off of the $25/month".

Revenue and cost functions for producing and selling quantity x for certain production facility are given below.

R(x) = 12x - x²

C(x) = 18 + 3x

a) Find out profit function P(x).

b) Use Excel to sketch functions R(x), C(x) and P(x) for the interval 0≤ x ≤ 10. Copy and paste graph below. Use Scatter plot with smooth lines and markers.

c) Calculate the break-even quantities.

d) Find out the marginal revenue R'(x).

e) Find out the marginal cost C'(x)

f) At what quantity is profit maximized?

Reference no: EM1323312

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