A company manufactures a product that is used in-house as well as having commercial applications. The fixed cost is $70,000 per month and variable cost is $80 per unit. The selling price per unit is given by P = $200 - 0.02D. Determine:
a. The optimum volume for this product and confirm that a profit occurs at this level of demand.
b. The value at which breakeven occurs i.e., range of profitable demand.