Math 22 Business and Economics Applications

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Optimization in Business and Economics

1) Find the number of units that minimizes the average cost per unit when

Then, , so , so since is positive.

2) Find the price that will maximize profit for the demand and cost functions, where is the price, is the number of units, and is the cost. Given the demand function and the cost function .

Notice: The revenue function
The Profit function is
Then, , so
Therefore, the price is a unit will maximize the profit.

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