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Derivatives : Maximizing Profit

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Acme can produce DVD players at a cost of $140 each and market analysis estimates that if the players are sold at x dollars apiece, consumers in a region will buy approximately 2000e^-0.01x machines per week. At what price should the players be sold to maximize profit?

$240
$265
$340
$390
$415
$485
none of these

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Solution Summary

Maximum profit is found using a derivative. The solution is detailed and well presented. The response received a rating of "5/5" from the student who originally posted the question.

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We can find the profit function P(x) as follows.

P(x)=(x-140)*2000e^(-0.01x)

So, to maximize P(x), we take ...

Solution provided by:
Changping Wang, MA
Education
  • BSc , Wuhan Univ. China
  • MA, Shandong Univ.
Recent Feedback
  • "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
  • "excellent work"
  • "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
  • "Thank you"
  • "Thank you very much for your valuable time and assistance!"
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