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Profit maximizing level of sales-advertising expenditure

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Reference no: EM132256825

Suppose a firm's inverse demand for their product is P=200-4Q+6A^0.5, where Q is the number of units sold and A is the dollar amount spent on advertising. Further assume that the cost function for this firm is C(Q)=2Q^2+5Q. Determine the profit maximizing level of sales and advertising expenditure.

The final answer should be Q*=6.5 and A*=$380.25, but I get confused when we start taking the derivatives.

Reference no: EM132256825

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