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9. The research department in a company that makes clocks has found the following price-demand
and cost functions:
p(x) = 50 0.00125x
where x is the number of clocks, p(x) is in dollars and C(x) is in thousand dollars.
a) Find the profit function.
b) For what quantities of clocks will there be a profit (as oppossed to a loss).
c) Find the marginal profit function.
d) Graph the profit function. (Be detailed and accurate.)
e) Calculate and interpret P 0 (25) in a complete sentence.
f) Find the maximum profit. (Make sure you actually give the profit.)
10. Consider the cost function C(x) = 48, 000+1500x for a computer company, where x is the number
of computers, and 1000 x 60, 000.
a) What is the exact cost of the 5000th computer?
b) Use marginal cost to estimate the cost of the 5000th computer?
11. Mary deposits $5,000 annually for 10 years, into an account paying 6% compounded annually.
After her last deposit, she stops depositing money, but lets her account sit for an additional 20
years.
a) How much money is in the account at the end (20 years after she stopped depositing)?
b) Marys partner, Chris, decides to start making annual deposits into an account that earns the
same as Marys account. If Chris makes deposits for 10 years, how much should deposits be,
so that Chris has the same amount of money in the end as Mary will?
12. Kellen wants to start depositing money annually into an IRA that pays 2.5% compounded annually. He plans on depositing for 50 years. He then hopes to live for an additional 100 years after
retirement. If he plans on withdrawing $25,000 per year during his retirement, how much should
he start depositing annually today?
13. The price-demand equation for home-delivered large pizzas is p + 0.002x = 38.2 where x is the
number of pizzas. The current price of one pizza is $21.
(a) What is the elasticity of demand function, E(p)?
(b) Given a 10% price increase what is the approximate relative change in demand?
(c) Given the 10% price increase does the revenue increase or decrease? Indicate whether it is
elastic, inelastic, or unit demand.