Question

A manufacturing company sells high-quality wireless headphones through a chain of specialty shops.The demand equation for these headphones is:P=400-50Q, 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=800*ln(Q+5)-1000

a.at Q=2, how much the revenue and the profit ?

b.for which value of Q is there unit elasticity of demand for the headphones?

c.how many headphones must be sold to maximise profit?

d.what is the value of the second derivative of the profit function at the maximum found in the previous question?

Answer 1