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**Krarup****Guest**

The demand for a new product is given by: p =10 - 0,01M

P is the price, and M is the production.

By the above, I can see that demand curve will hit the price axis in 10. But how do I figure where the curve will hit the y-axis?

**mathsyperson****Moderator**- Registered: 2005-06-22
- Posts: 4,900

The y-axis is when x = 0. In this case, x is the price, so you need to solve 0 = 10 - 0.01m

This is the same as 0.01m = 10, which means that m = 1000.

So that means that it will cross the y-axis at 1000. (Although I think in reality there would be a lot more demand for something that was free. )

Why did the vector cross the road?

It wanted to be normal.

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**krarup****Guest**

So simple (:

Then I have just a another question.

The marginal revenue is defined by 10-0.02M so, it will hit the y axis at 5000.

The question is then, what price and production should the company chose?

**krarup****Guest**

Oh, thats simple too (;

5000 at a price a 5, would give the most benefit

Just talking to myself

**George,Y****Member**- Registered: 2006-03-12
- Posts: 1,306

Not necessarily. You have to take both the revenue and the cost into account and find the profit peak.

**X'(y-Xβ)=0**

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