21st Century Insurance offers mail-order automobile insurance to preferred risk drivers in the Los Angeles area. The
Question:
21st Century Insurance offers mail-order automobile insurance to preferred risk drivers in the Los Angeles area. The company is the low-cost provider of insurance in this market but doesn't believe its annual premium of $1,500 can be raised for competitive reasons. Rates are expected to remain stable during coming periods; hence, P = MR = $1,500. Total and marginal cost relations for the company are as follows: TC = $41,000,000 + $500Q + $0.005Q2 MC = ∂TC/∂Q = $500 + $0.01Q A. Calculate the profit maximizing activity level. B. Calculate the company's optimal profit, and optimal profit as a percentage of sales revenue (profit margin).
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 58% (12 reviews)
A Set MR MC and solve for Q to find the profitmaximizing activity level MR MC 1500 500 001Q 001...View the full answer
Answered By
JAPHETH KOGEI
Hi there. I'm here to assist you to score the highest marks on your assignments and homework. My areas of specialisation are:
Auditing, Financial Accounting, Macroeconomics, Monetary-economics, Business-administration, Advanced-accounting, Corporate Finance, Professional-accounting-ethics, Corporate governance, Financial-risk-analysis, Financial-budgeting, Corporate-social-responsibility, Statistics, Business management, logic, Critical thinking,
So, I look forward to helping you solve your academic problem.
I enjoy teaching and tutoring university and high school students. During my free time, I also read books on motivation, leadership, comedy, emotional intelligence, critical thinking, nature, human nature, innovation, persuasion, performance, negotiations, goals, power, time management, wealth, debates, sales, and finance. Additionally, I am a panellist on an FM radio program on Sunday mornings where we discuss current affairs.
I travel three times a year either to the USA, Europe and around Africa.
As a university student in the USA, I enjoyed interacting with people from different cultures and ethnic groups. Together with friends, we travelled widely in the USA and in Europe (UK, France, Denmark, Germany, Turkey, etc).
So, I look forward to tutoring you. I believe that it will be exciting to meet them.