Q4. Given equations for TR and TC (as shown in class or as posted a. Define tota

Question

Q4. Given equations for TR and TC (as shown in class or as posted a. Define total profit (in terms of q or p) b. At what value of q profit will be maximum? c. What is the maximum value of profit at that output? What is t d. How do you know that profit has attained maximum at that ou Q5. Inventory Models a. Consider the EOQ Model and its TC function (as shown in cla model. b. Solve a numerical example by plugging in values of Co, Ch, a c. Consider the Production Lot Size Model and its TC function (a minimizing TC in this model d. Solve a numerical example by plugging in values of Co. Ch. D ANNOUNCEMENT

Explanation / Answer

4.a. Total profit is the difference between total revenue and total cost that is TR-TC

b . Profit is maximum when marginal revenue = marginal cost .

c. TO find the maximum profit, we have to solve for p , substitute that value of p in the equation of total profit that we get in part a .

d. TO check out whether profit is maximum or not, we find out the second derivative of the profit at the point we get in c . If it is negative, then the profit is maximum .

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