A firm is planning to manufacture a new product. The sales department estimates that the quantity that
Question:
P = $35.00 - 0.02Q
Where P =selling price per unit
Q = quantity sold per year
On the other hand, the management estimates that the average cost of manufacturing and selling the product will decrease as the quantity sold increases.
They estimate
C = $4.00Q + $8000
Where C = cost to produce and sell Q per year The firm's management wishes to produce and sell the product at the rate that will maximize profit, that is, where income minus cost will be a maximum. What quantity should the decision makers plan to produce and sell each year? (775 units)
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
Question Posted: