Answered step by step
Verified Expert Solution
Question
1 Approved Answer
2. (* * *) Dr. Bob sets up a new company, Alpha Electronics, producing specialized but low tech computer chips. The demand q in thousands
2. (* * *) Dr. Bob sets up a new company, Alpha Electronics, producing specialized but low tech computer chips. The demand q in thousands of chips per month is related to the price p in dollars by q(p) = 20e P. Note that there is still demand q > 0 even for very large prices p (some consumers need these chips no matter the cost). The chip factory has fixed costs of $1,000 per month and each chip costs $1 to manufacture. (a) (1 mark) Find the inverse of the demand curve, the function p(q). (b) (2 marks) Find the profit function P(r) in thousands of dollars per month where r is the production of the factory in thousands per month matching demand (q = x). (c) (2 marks) Find the maximum profit per month and the corresponding production r. Give a short justification of how you know this is the maximum
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started