Attempts $$ Keep the Highest $/2$

$5.$ Exercise $11\mathrm{.}6$

Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells $30,000$ gallons of polyol per year at an average price of $$30$ per gallon. Fixed costs of manufacturing polyol are $$180,000$ per year and total variable costs equal $$360,000.$ The operations research department has estimated that a $15$ percent increase in output would not affect fixed costs but would reduce average variable costs by $60$ cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be $-2\mathrm{.}0.$

How much would Wyandotte have to reduce the price of polyol to achieve a $15$ percent increase in the quantity sold? percent

Such a price cut would $q,$ total revenues from $$900,000$ to $$ Total costs would be $$ and total profits would be $$

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