Raymond B. answered • 01/14/21
Math, microeconomics or criminal justice
profit maximizing output is the derivative of r(x)-c(x) set equal to zero
but that leads to 245-105 =0 and no solution. if these are really the revenue and cost functions, the profit maximizing output is infinite. The greater the output the greater the profit
Odds are there's an x^2 term missing. Maybe 245x is really meant to be 245x^2
profit = r-c = 245x^2 - 105x - 70000 where 105x = variable cost & 70,000 = fixed cost
take the derivative and set =0, then solve for x for the profit maximizing output level
(r-c)' = 490x -105 = 0
x = 105/490= 21/98, plug that into r-c and you get a negative profit or a loss
that x value minimizes loss if you stay in business, which you would in the short run if you can't sell the business or otherwise escape the fixed cost. But in the long run, you shut down or sell the business.
the revenue function is probably not 245x or 245x^2,but some other term(s)
