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Q: A music DVD company sells a DVD for $40. Let q be the number of items. They …

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Wize University Calculus 1 Textbook > Applications of Differentiation for Business & Econ

Marginal Concepts In Economics

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Q:\bf{Q:} A music DVD company sells a DVD for $40. Let qq be the number of items. They sell 36000 units for this price per year. Marketing studies show that for each dollar increase they sell 600 fewer DVDs. The DVDs cost $15 each to make with a fixed cost of $100,000 for the company.

(a) Find price-demand relationship.

(b) Find the profit function.

(c) Find the marginal profit.

(d) Find the optimal price and quantity to maximize profit.

(e) When they sell DVDs for $50, will profit increase or decrease with a slight raise in price?
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