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Chapter 5
2 Double the gradient to find the marginal revenue: MR = a − 2bQ.
Establish the marginal cost MC. This will simply be the variable
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cost per unit.
4 To maximise profit, equate MC and MR and solve to find Q.
Substitute this value of Q into the price equation to find the
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optimum price.
6 It may be necessary to calculate the maximum profit.
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