Given the revenue function find out the marginal revenue, marginal cost, optimal revenue.
A firm estimates that the cost (in millions of $) of developing and introducing a new product over t years equals C = 500 - 20t + t2. Present value revenues related to time t are estimated at R = 750 + 35t - 1.5t2. The firm knows that the new product cannot be completed before 6 years.
Assume the company revises its revenue projections in response to a patent race with another company. Its new estimated revenue function is R = 750 + 35t - 4.0t2. What is the optimal project duration now?