Answer to Question #54148 in Microeconomics for Asif

Question #54148
A firm has determined that its annual profits depend on the number of sales-people it employs and the amount spent on advertising. Specifically the relationship between profits, π (in Millions), salespeople; S (in thousands) and advertising expenditures, A (in millions), is π=-10+60S+10A-2S^2-A^2 Determine the number of salespeople and the amount of advertising expenditures that would maximize the firms's profits.
1
Expert's answer
2015-08-20T00:00:44-0400
To determine the number of salespeople and the amount of advertising expenditures that would maximize the firms's profits we need to to derive MP function, MP = π' = 0.
So:
MP'(S) = 60 - 4S = 0
S = 15 units
MP'(A) = 10 - 2A = 0
A = 5 units.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS
paypal