Advertising expenditures in thousands of dollars x have been
Advertising expenditures in thousands of dollars, x, have been found to relate to profit, P, approximately as
P = x3 - 100x 2 + 3125x .
What advertising expenditure would produce the maximum profit, and what profit is expected at this expenditure?
Solution
P(x) = x^3 - 100x^2 + 3125x
P\'(x) = 3x^2 - 200x + 3125
Solving the quadratic equation
3x^2 - 200x + 3125 = 0
x = 41.6666, x=25
P\'\'(x) = 6x - 200
P\'\'(25) = 6(25) - 200 = -50
Hence the function is having at maximum at x=25
P(25) = (25)^3 - 100(25)^2 + 3125(25)
=> 31250 thousand
