Question: Suppose in Exercise II that the producer is subjected to a tax of $10 per thousand units. What should his production level be in order to maximize profits?
Exercise II: If the cost equation in Exercise I is C(x) = 0.5x2 + x + 1, what price should be charged to maximize profit?
Exercise I: A producer finds that demand for his commodity obeys a linear demand equation p + 2x = 100 where p is in dollars and x in thousands of units.
(a) Find the level of production that will maximize revenue. If the producer s costs are given by C(x) = 2 + 3x what should his level of production be to maximize profits?