Question: A plant produces a commodity whose selling price is given by the function P = $500 - 0.0025D per unit, where D is the number
A plant produces a commodity whose selling price is given by the function P = $500 - 0.0025D per unit, where D is the number of units manufactured. Total fixed cost is $26,335 per year and variable cost V = $440 - 0.005D. The plant is designed to manufacture 5000 units per year. Determine the level of output that produces the maximum annual profit and breakeven point. On a graph, show the curves for average variable production cost per unit, incremental cost per unit and incremental annual profit from sales per unit.
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