Question
Jane manages a small bakery that bakes only make-to order cakes. Her total cost (TC) and total revenue (TR) functions are as follows: TC =
Jane manages a small bakery that bakes only "make-to order" cakes. Her total cost (TC) and total revenue (TR) functions are as follows:
TC = 50 + 80Q - 10Q2 + Q3
TR = 100Q - 8Q2
The bakery has a capacity of handling 30 units at any one time.
- Determine the price she should charge if she wants to maximise total revenue.
- Compute the price she should charge if she wants to maximise profits.
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Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
1st Edition
978-1464146978, 1464146977
