Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A manufacturing company sells high-quality wireless headphones through a chain of specialty shops. The demand equation for these headphones is: P = 500 - 10Q

image text in transcribed
image text in transcribed
A manufacturing company sells high-quality wireless headphones through a chain of specialty shops. The demand equation for these headphones is: P = 500 - 10Q where P is the selling price (in $ per unit) and Q is the quantity demanded (in thousands of headphones). The company's total cost function is given by C = 400*In(Q+5) + 100 a. (2 marks) At Q = 4, the revenue is (thousand dollars) and the profit is (thousand dollars) (Round your answer to 2 decimal places) b. (2 marks) For which value or & is there unit elasticity of demand for the headphones? (Round your answer to 2 decimal places) thousand headphones c. (1 mark) How many headphones must be sold to maximise profit? (Round your answer to 2 decimal places) thousand headphones d. (1 mark) What is the value of the second derivative of the profit function at the maximum found in the previous question? (Round your answer to 2 decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Macroeconomics

Authors: Robert C. Feenstra, Alan M. Taylor

Fourth Edition

1319061729, 978-1319061722

More Books

Students also viewed these Economics questions

Question

1. Background knowledge of the subject and

Answered: 1 week ago

Question

2. The purpose of the acquisition of the information.

Answered: 1 week ago