A tennis racquet manufacturer is negotiating lease on land to build a manufacturing plant. The price charged will be determined by p=$450-(0.1)D per tennis racquet. The manufacturer faces variable costs of $25 per tennis racquet. Fixed costs of manufacturing are currently $25,000, in addition to the value of the lease being negotiated.

a. For this situation, determine the optimal monthly sales volume for this product.

b. How high can the lease be in order for the firm to make a positive profit?

Answer rating: 100% (QA)

a Selling price of 1 racquet p 450 01D Total Cost price of racquet c ... View the full answer