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The profit function of a firm for a given level of output 'x' is estimated by nonlinear...

Question:

The profit function of a firm for a given level of output 'x' is estimated by nonlinear regression to be:

{eq}P(x) = -(x - 375)^{2}+1,200 {/eq}.

What is the production level at which profit is maximized? What is the maximum profit?

Profit Function

A profit function shows how much profit is made (P) for various levels of production where the quantity produced is (x).

Answer and Explanation: 1

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The production level is 375 and the corresponding profits are $1200.

To maximize a function, in this case our profit function P, we need to use...

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Profit Maximization: Definition, Equation & Theory

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Chapter 24 / Lesson 6
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Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.


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