John M.

asked • 23d

Profit margin question

You are the sole producer of a novel polymer that has the potential to transform a number of other industries: synthetic clothing, medical devices, and sports equipment, for example. You have a patent on the chemical structure for this polymer for 9 more years. From the entirety of industries that will use your product, you face a demand curve given by P = 400 – 10Q. (Units are in thousands of tons produced per year.) Your marginal cost curve is given by MC = 5 + 15Q.

Identify the quantity at which you’ll want to produce, Q, to maximize profit. (Round down to the nearest thousand tons of production.)

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