Calculating optimal output and price levels
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Suppose the Kalamazoo Competition-free Concrete's demand function is D(P) = 5,000 -50P, its marginal cost is $40 per cubic yard, and its faces an avoidable fixed cost of $40,000 per year. What is its profit-maximizing sales quantity and price?
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Solution Summary
The solution determines the optimal price and quantity in the given case.
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D(P)=Q=5000-50P
50P=5000-Q
P=100-0.02Q
Total ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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