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CA Foundation · Quantitative Aptitude · Differential and Integral Calculus

A manufacturing company's profit function is given by P(x) = -2x² + 80x - 300, where x is the number of units produced (in hundreds). At what production level is the profit maximized?

The profit function P(x) = -2x² + 80x - 300 is maximized by finding where P'(x) = -4x + 80 = 0, which gives x = 20 hundred units. The second derivative P''(x) = -4 is negative, confirming a maximum.

  1. A10 hundred units
  2. B20 hundred unitsCorrect
  3. C30 hundred units
  4. D40 hundred units

Explanation

To find the maximum profit, we take the derivative and set it equal to zero: P'(x) = -4x + 80 = 0. Solving for x gives x = 20 hundred units. We confirm this is a maximum by checking the second derivative: P''(x) = -4 < 0, confirming a maximum. A distractor of 10 units results from solving -2x + 40 = 0, an arithmetic error in differentiation.

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