Question: Question one A firm makes a single product with a marginal cost of Sh.15. Up to 40,000 units can be sold at Sh.30 per unit

Question one

  1. A firm makes a single product with a marginal cost of Sh.15. Up to 40,000 units can be sold at Sh.30 per unit but additional sales can only be made by reducing the selling price to Sh.20 per unit. Fixed costs are Sh.250,000 per period and there is a planned profit of Sh.400,000 per period.

Required: How many units must be made and sold?

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