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    				| 1. | The marginal cost of production of a firm is given by C'(x) = 5 + 0.13x, the marginal revenue is given by R'(x) = 18 and the fixed cost is Rs. 120. Find the profit function. | 
| Answer» MC = C'(x) = 5 + 0.13x C(x) = ∫C'(x) dx + k1 = ∫(5 + 0.13x) dx + k1 = 5x + 0.13/2 x2 + k1 When quantity produced is zero, fixed cost is 120 (i.e) When x = 0, C = 120 ⇒ k1 = 120 Cost function is 5x + 0.065x2 + 120 Now given MR = R'(x) = 18 R(x) = ∫18 dx + k1 = 18x + k2 When x = 0, R = 0 ⇒ k2 = 0 Revenue = 18x Profit P = Total Revenue – Total cost = 18x – (5x + 0.065x2 + 120) Profit function = 13x – 0.065x2 – 120 | |