The Marginal Cost for the Production of the New Super $C ^ { \prime } ( q ) = 15 - 0.0002 q$

question 91

Essay

The marginal cost for the production of the new Super Widget at Widget International is give by $C ^ { \prime } ( q ) = 15 - 0.0002 q$ , whereas the marginal revenue is $R ^ { \prime } ( q ) = 20 - 0.003 q$ , where in both cases q represents the number of units produced.
(a) Determine the change in profits when sales are increased from 700 to 1700 units.
(b) What is the change in profit when sales increase from 1700 to 2700 units? Discuss your answer.

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Definitions:

Marginal Cost

Marginal cost is the cost of producing one additional unit of a product or service, a crucial concept in economics for determining optimal production levels and pricing strategies.

Marginal Revenue

The surplus earnings acquired through the sale of an extra product or service unit.

Increasing Output

The process of raising the quantity of goods or services produced by a company or economy, often aiming for higher efficiency and profitability.

Marginal Analysis

The examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.