Question

A company profits $12,430 off of the sale of 830 items. The company has a marginal cost of $26 per item and fixed costs of $5,000. What is the revenue function? 

          A company profits $12,430 off of the sale of 830 items. The company has a marginal cost of $26 per item and fixed costs of $5,000. What is the revenue function?

Added by Alba S.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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A company profits $12,430 off of the sale of 830 items. The company has a marginal cost of $26 per item and fixed costs of $5,000. What is the revenue function?
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Transcript

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00:01 Hello, let's a look at the question.
00:02 We have been given a company's demand function by and its cost function as we have to find what would the company's margin revenue at dollar of $4 .50 per item.
00:28 So, as we first need to find the company's marginal cost, the margin revenue function, the marginal cost function is derivative of the cost function.
00:35 So our mcq would be dc q by dq, it should be 0 .03 q squared minus 14 q plus 85.
00:57 Now for an mr function we'll find the derivative of price function that's a p.
01:10 8 by b 2 by 2 we'll see this as minus 0 .05.
01:19 Now to find the quantity at which margin revenue is dollar 45 per item we set mrq equals to 450 and solve for q which would be minus 0 .0 .0 .5 is equal to 4 .50 by q then argue would be 9 ,000.
01:38 So when the company produce and sells 9 ,000 item margin revenue will be equal to dollar 450 per item...
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