Asked by pypski
Any help at all is deeply appreciated. I am trying to figure out the formulas to use for the following problems:
1. Suppose that in a monopoly market the total cost per week of producing a high tech product is given by C(x) =3600+100x+2x^2. Suppose further that the weekly demand function for this product is p=500-2x. Find the number of units that will give the break even points for the product. Find the number of units that will give maximum profit.
I think the C(x) is suppose to = the p but I can't seem to get that to work.
2. Bond Pricing: A 20-year corporate bond has a maturity value of $25, 000 and coupons are paid at 5% at the end of each year. If an investor wants to earn a yield of 7% compounded semiannually, what should she or he pay for this bond?
3. A couple is saving for their child's college. They decided they would like to have $50,000 in 18 years. If they can earn 4.5% compounded semiannually, how much should they deposit at the beginning of each period?
1. Suppose that in a monopoly market the total cost per week of producing a high tech product is given by C(x) =3600+100x+2x^2. Suppose further that the weekly demand function for this product is p=500-2x. Find the number of units that will give the break even points for the product. Find the number of units that will give maximum profit.
I think the C(x) is suppose to = the p but I can't seem to get that to work.
2. Bond Pricing: A 20-year corporate bond has a maturity value of $25, 000 and coupons are paid at 5% at the end of each year. If an investor wants to earn a yield of 7% compounded semiannually, what should she or he pay for this bond?
3. A couple is saving for their child's college. They decided they would like to have $50,000 in 18 years. If they can earn 4.5% compounded semiannually, how much should they deposit at the beginning of each period?
Answers
Answered by
Steve
Hmmm. Too bad you didn't show <i>your</i> work...
revenue = price * quantity.
breakeven is when cost = revenue, so
3600+100x+2x^2 = x(500-2x)
x = 10,90
maximum profit will be at the vertex of p = r-c, halfway between the roots: x=50
revenue = price * quantity.
breakeven is when cost = revenue, so
3600+100x+2x^2 = x(500-2x)
x = 10,90
maximum profit will be at the vertex of p = r-c, halfway between the roots: x=50
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