Question: $A B C$ plc is about to launch a new product. Facilities will allow the company to produce up to 20 units per week. The
$A B C$ plc is about to launch a new product. Facilities will allow the company to produce up to 20 units per week. The marketing department has estimated that at a price of $\$ 8,000$ no units will be sold, but for each $\$ 150$ reduction in price one additional unit per week will be sold.
Fixed costs associated with manufacture are expected to be $\$ 12,000$ per week.
Variable costs are expected to be $\$ 4,000$ per unit for each of the first 10 units; thereafter each unit will cost $\$ 400$ more than the preceding one. The most profitable level of output per week for the new product is:
A. 10 units
B. 11 units
C. 13 units
D. 14 units
E. 20 units
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