Maximisation of Revenue

•If  p=f(x) is the price per unit and x is the number

of units sold, then the revenue (R) is given by
To maximize the total revenue, we let and solve
for x. Now R is maximum at the value of x,
where Since , the necessary condition to
maximise the total revenue is that
•Q.  The total revenue function of a firm is given
by , where x is the number of units sold. Find the
number of units to be sold so as to maximise the
revenue also find the maximum revenue.
Solution:
Thus 20 units to be sold to get the maximum
revenue of 24000.
•Q  the demand curve for a particular commodity
is , find the level of output at which the total
revenue is maximum. What is the maximum
revenue?

Solution:
Thus the maximum revenue is 16 at the output
of 8 units.
Q. A company handles an apartment building
with 200 units. Experience has shown that if the
rent for each of the units is ₹150 per month, all
the unit will be filled, but one unit will become
vacant for each ₹1 increase in the monthly rate.
What rent should be charged to maximise the
total revenue from the building? Also determine
the maximum revenue.
•  x denote the increase in rent.
Let
The increased new rent=₹(150+x)
Also the decreased in the number of occupied units=(200-x)
Revenue,

R is to be maximised.

For R to be maximised, let

Since at R attains maximum at x=25

At x=25 R=30625
And new rent is 150+x=175
₹175 is to be charged to get maximum revenue of ₹30,625
•  
Minimisation of Cost, Average cost and Marginal cost

Q. the total cost function of a product is given by

Where x in the number of units produced. Determine the number

of units that should be produced to minimize the total cost.
•Q.  If the cost function of a firm is given by

Where C stands for cost and x for output,

calculate the output at which the average cost is
minimum. Show that at this point, marginal cost
is equal to average cost.
•Q.  The total cost function of a manufacturing
firm is given by

Find the output at which the marginal cost is

minimum.
•   Maximisation of profit
Q. A firm’s profit function is given by

Where x is the number of units. Find the output at

which the profit is maximum. Also find the total profit
and the profit per unit.
•   A firm has the revenue function
Q.

And the cost function

Find the maximum profit.