Question
it is assumed that the toothpaste market is perfectly competitive and the current price of a case of toothpaste is 42.00. CPI (the company) has estimated its marginal cost function to be as follows: MC (Marginal Costs) =.006Q (Quantity).
The board would like to know how many cases of toothpaste should be produced in order to maximize profits
The board would like to know how many cases of toothpaste should be produced in order to maximize profits
Answers
In calculus terms,
Profit=P(q)=42q-0.006q*q
dP(q)/dq = 42-0.012q = 0
q=42/0.012=3500 cases.
Profit=P(q)=42q-0.006q*q
dP(q)/dq = 42-0.012q = 0
q=42/0.012=3500 cases.
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