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 x+ 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



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