Math Problem Statement

If fixed costs are $350, what is the profit at the optimal integer output level?

Please specify your answer as an integer.

Solution

To find the profit at the optimal integer output level q=5q = 5, we use the profit function:

Π(q)=4q2+39q350\Pi(q) = -4q^2 + 39q - 350

Substitute q=5q = 5 into the profit function:

Π(5)=4(5)2+39(5)350\Pi(5) = -4(5)^2 + 39(5) - 350 Π(5)=4(25)+195350\Pi(5) = -4(25) + 195 - 350 Π(5)=100+195350\Pi(5) = -100 + 195 - 350 Π(5)=95350\Pi(5) = 95 - 350 Π(5)=255\Pi(5) = -255

The profit at the optimal integer output level of 5 units is -255 dollars.

Do you want more details or have any questions?


  1. What factors can lead to a negative profit even at the optimal output level?
  2. How does a negative profit affect business decisions in the short term?
  3. What would be the break-even point given the fixed and variable costs?
  4. How does the steepness of the marginal cost curve affect profit?
  5. What are potential strategies to convert a negative profit into a positive one?
  6. How does changing the selling price to $50 per unit affect profit at the same output level?
  7. Could reducing fixed costs lead to a positive profit, and by how much?
  8. What are the implications of selling fewer units than the optimal output level?

Tip: Always check if external factors like changes in market demand could impact your pricing strategy and profitability.

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Math Problem Analysis

Mathematical Concepts

Profit function
Quadratic equations

Formulas

Profit function: \( \Pi(q) = -4q^2 + 39q - 350 \)

Theorems

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Suitable Grade Level

Undergraduate level