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QMDDM – OCT 2022 – L2 – Q4 – Revenue Cost Profit Optimization

Given total revenue TR = -14x² + 2000x and total cost TC = x³ - 15x² + 1000 functions, explain marginal and average concepts, and calculate production levels to maximize revenue, minimize cost, maximize profit, with comments.

The total revenue and total cost for a product are related to production x by:

2 14 2000 TR X X

− +

3 2 15 1000 TC X X

− +

(a) Explain briefly (in your own words) the following terms in relation to the total revenue

and total cost above: (i) Marginal Cost (ii) Marginal Revenue (iii) Marginal Profit (iv) Average Revenue

(b) Calculate, how many units should the company produce in order to

(i) Maximize total revenue (ii) Minimize cost (iii) Maximize profit. (iv) Comment on (i), (ii) and (iii) above.

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QTB – Nov 2015 – L1 – SB – Q2a – Mathematics of Business Finance

Calculate price elasticity of demand using given demand function and interpret the result.

Given that the demand function of a business is

calculate the price elasticity of demand when x=5  and interpret your result.

(Total: 6 Marks)

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QMDDM – OCT 2022 – L2 – Q4 – Revenue Cost Profit Optimization

Given total revenue TR = -14x² + 2000x and total cost TC = x³ - 15x² + 1000 functions, explain marginal and average concepts, and calculate production levels to maximize revenue, minimize cost, maximize profit, with comments.

The total revenue and total cost for a product are related to production x by:

2 14 2000 TR X X

− +

3 2 15 1000 TC X X

− +

(a) Explain briefly (in your own words) the following terms in relation to the total revenue

and total cost above: (i) Marginal Cost (ii) Marginal Revenue (iii) Marginal Profit (iv) Average Revenue

(b) Calculate, how many units should the company produce in order to

(i) Maximize total revenue (ii) Minimize cost (iii) Maximize profit. (iv) Comment on (i), (ii) and (iii) above.

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You're reporting an error for "QMDDM – OCT 2022 – L2 – Q4 – Revenue Cost Profit Optimization"

QTB – Nov 2015 – L1 – SB – Q2a – Mathematics of Business Finance

Calculate price elasticity of demand using given demand function and interpret the result.

Given that the demand function of a business is

calculate the price elasticity of demand when x=5  and interpret your result.

(Total: 6 Marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "QTB – Nov 2015 – L1 – SB – Q2a – Mathematics of Business Finance"

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