TP TFC TVC 0 150 - 1 15050 2 15075 3 150105 4 150145 5 1502...

TP TFC TVC 0 $150 $ - 1 $150 $50 2 $150 $75 3 $150 $105 4 $150 $145 5 $150 $200 6 $150 $270 7 $150 $360 8 $150 $475 9 $150 $620 10 $150 $800 TP = total product TFC = total fixed cost TVC = total variable cost If a competitive firm faced with these costs finds that it can sell its product at $ 90 per unit, it will: Produce 7 units and realize a profit of $120 Produce 8 units and realize a profit of $210 Produce 10 units and incur a loss of $50 Close down in the short run

Transcript

00:01 Hello, let here let p equals to p equals to price, price in dollars, price in dollars and x and x represent here quantity of, quantity of sweat, sweat shirt sold.

00:27 So, here p1 x1, p1 x1 is equals to 29 .13 comma 190 here and p2 x2, p2 x2 is equals to here 21 .83 290 here.

00:45 Now assuming the demand function is linear so by, by point set, by point slope, by point slope formula, by point slope formula p minus p minus 29 .13 divided by x minus x minus 190 is equals to here 21 .83 minus 29 .13 divided by complete number 290 minus 190 here.

01:20 So by simplifying this expression we can write it as here p minus 29 .13 divided by x minus 190 is equals to here minus 0 .073 here or by simplifying this expression by cross multiplying we can write it as here p minus 29 .13 is equals to minus 0 .073 into x minus 190 here or we can write it as here p minus 29 .13 is equals to minus 0 .073 x plus 13 .87 or we can write it as here p is equals to minus 0 .073 x plus 43 here.

02:08 Now having found the demand equation here so the revenue function, so revenue function, revenue function is given by here r of x is equals to p x here or we can write it as here revenue function r x is equals to minus 0 .073 x plus 43 into x here or we can write it as here r of x is equals to minus 0 .073 x square plus 43 x here.

02:45 So the given point are used to using the point slope formula to get the demand equation and the revenue function.

02:53 Now come to the second part here.

02:55 In the second part given that the fixed cost, fixed cost is equals to 370 dollar and variable cost, variable cost is equals to here 2 .17 dollar here.

03:13 So the cost function c x is equals to 2 .17 x plus 370 here.

03:19 So the profit function, profit function, profit function can be written as here p of x which is equals to revenue function minus cost function here.

03:32 So by substituting values here we can write this expression as this one is equals to p of x is equals to minus 0 .073 x square plus 43 x minus minus c x which is 2 .17 x plus 370 here...

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