Math Problem Statement

Consider the following demand function:

p=D(x)=126−2x‾‾‾‾‾‾‾‾‾√ Step 2 of 2 : Find the value of x that maximizes the revenue.

Solution

To find the value of xx that maximizes revenue, let's go through the steps. Revenue, R(x)R(x), is the product of price pp and quantity xx:

R(x)=xp=xD(x)R(x) = x \cdot p = x \cdot D(x)

Given: p=D(x)=1262xp = D(x) = 126 - 2\sqrt{x}

Thus, the revenue function R(x)R(x) becomes: R(x)=x(1262x)R(x) = x \cdot (126 - 2\sqrt{x}) or R(x)=126x2xxR(x) = 126x - 2x\sqrt{x}

To maximize R(x)R(x), take the derivative of R(x)R(x) with respect to xx and set it to zero.

Step 1: Differentiate R(x)R(x)

  1. Differentiate 126x126x with respect to xx: 126126.
  2. For 2xx-2x\sqrt{x}, rewrite xxx\sqrt{x} as x3/2x^{3/2}, then differentiate: ddx(2x3/2)=3x1/2\frac{d}{dx}(-2x^{3/2}) = -3x^{1/2}

So: [ R'(x)

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Math Problem Analysis

Mathematical Concepts

Revenue Maximization
Differentiation
Optimization

Formulas

Revenue function R(x) = x * p
Demand function p = D(x) = 126 - 2√x
Differentiation of R(x) with respect to x to find critical points

Theorems

First Derivative Test for Maxima and Minima

Suitable Grade Level

Grades 11-12