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Question: A firm has analysed its sales and profitability and found that its profit can be represented as:
F = -100 + 100Q - 5Q2
where F is profit (£000s) and Q is units sold (in 000s). It has also found that its costs are:
C = 100 + 2Q2
where C is costs (£000s).
(a) Obtain a third equation showing the firm's revenue, R.
(b) Using a graph determine how many units the firm should sell to maximise profit.
(c) What will the firm's costs be at the profit-maximising level of sales?
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