How To Calculate Revenue Function From Demand Function

C 40 000 0 3 q where c is the total cost.

How to calculate revenue function from demand function. In symbols π r c p q f v q. Cost function c x total cost of producing the units. Say that you have a cost function that gives you the total cost c x of producing x items shown in the figure below. Demand function d q p d q in this function the input is q and output p q independent variable p dependent variable recall y f x p d q the price at which q units of the good can be sold unit price p most demand functions quadratic project 1 demand curve which is the graph of d q is generally.

Revenue is product of demand and number of items. Marginal cost marginal revenue and marginal profit all involve how much a function goes up or down as you go over 1 to the right this is very similar to the way linear approximation works. To calculate total revenue we start by solving the demand curve for price rather than quantity this formulation is referred to as the inverse demand curve and then plugging that into the total revenue formula as done in this example. X 50p 8500 is the demand equation and it depends on the price.

Profit function p x total income minus total cost. Note we are measuring economic cost not accounting cost. Since profit is the difference between revenue and cost the profit functions the revenue function minus the cost function. To find the revenue function use r x p to find p use x 50p 8500 to solve for p x 50p 8500 x 8500 50p 8500 8500 x 8500 50p divide both sides by 50.

Demand revenue cost profit. Stack exchange network consists of 176 q a communities including stack overflow the largest most trusted online community for developers to learn share their knowledge and build their careers. This means differentiate the cost revenue or profit. The equation for the cost function is.

In this video we maximize the revenue from a linear demand function by. In this video we maximize the revenue from a linear demand function by finding the vertex of a quadratic function. P x r x c x marginal is rate of change of cost revenue or profit with the respect to the number of units.