Introduction to how to find profit function:
Profit function is the part of the financial of the mathematics. In this the gain or profit we map the particular factor for the achievable output gain or the output prices. The profit function is been presented by the equation (p, w)* can be mapped to the profit level p *. It cannot be mapped as p **. The profit function is because of the large amount of the pioneering work. Understanding Profit and Loss is always challenging for me but thanks to all math help websites to help me out.
Properties to find the profit function:
There are few properties represented by the profit level to find the profit function and the equation:
(1) Condition for No losses: p (p, w)' 0
This property explains about the tolerance of the customer during loss. In this condition the producer cannot accept the loss and as a result he may give up the production or stop the production itself. It is also called as non – negative.
(2) Non-decreasing in p: If p' ' p, then p (p' , w) ' p (p, w)
This property explains about the huge amount of the profit. When a large amount of profit is achieved then the production remains unchanged.
(3) Non-increasing in w: If w' ' p, then p (p, w') ' p (p, w)
This property explains about the huge amount of loss, even when the production is increased.
(4) Convexity or interest rates in p and w:
This property explains the profit increasing gradually according to the customer’s production. This property is symmetric and semi-definite.
(5) Continuity or interest rates in p and w:
This property explains about the continuity of the profit in the even though the production of the customer is not increased.
Problems based on how to find the profit function:
Ex 1: A 40% profit on selling price is what percent mark-up. What is the percent profit on cost?
% profit on selling price / (100% - % profit on selling price) = % profit on cost.
.40 / .60 = .66
Or
66% profit on cost. - Answer
Ex 2: A shirt marked up 40% carries what percent of profit on selling price?
% profit on cost / (100% + % profit on cost) = % profit on selling price.
.40 / 1.40 = 0.285
Or
28.5% on selling price. - Answer
Profit function is the part of the financial of the mathematics. In this the gain or profit we map the particular factor for the achievable output gain or the output prices. The profit function is been presented by the equation (p, w)* can be mapped to the profit level p *. It cannot be mapped as p **. The profit function is because of the large amount of the pioneering work. Understanding Profit and Loss is always challenging for me but thanks to all math help websites to help me out.
Properties to find the profit function:
There are few properties represented by the profit level to find the profit function and the equation:
(1) Condition for No losses: p (p, w)' 0
This property explains about the tolerance of the customer during loss. In this condition the producer cannot accept the loss and as a result he may give up the production or stop the production itself. It is also called as non – negative.
(2) Non-decreasing in p: If p' ' p, then p (p' , w) ' p (p, w)
This property explains about the huge amount of the profit. When a large amount of profit is achieved then the production remains unchanged.
(3) Non-increasing in w: If w' ' p, then p (p, w') ' p (p, w)
This property explains about the huge amount of loss, even when the production is increased.
(4) Convexity or interest rates in p and w:
This property explains the profit increasing gradually according to the customer’s production. This property is symmetric and semi-definite.
(5) Continuity or interest rates in p and w:
This property explains about the continuity of the profit in the even though the production of the customer is not increased.
Problems based on how to find the profit function:
Ex 1: A 40% profit on selling price is what percent mark-up. What is the percent profit on cost?
% profit on selling price / (100% - % profit on selling price) = % profit on cost.
.40 / .60 = .66
Or
66% profit on cost. - Answer
Ex 2: A shirt marked up 40% carries what percent of profit on selling price?
% profit on cost / (100% + % profit on cost) = % profit on selling price.
.40 / 1.40 = 0.285
Or
28.5% on selling price. - Answer
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