A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. a) Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b) Using your knowledge from Finite Math, determine the Revenue function in terms of ?. c) Determine the Marginal Revenue at 2 different production levels for example 250 and 500 units. Interpret these results. (HINT: Consider what a positive or negative first derivative implies)
A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly
a) Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function.
b) Using your knowledge from Finite Math, determine the Revenue function in terms of ?.
c) Determine the Marginal Revenue at 2 different production levels for example 250 and 500 units. Interpret these results. (HINT: Consider what a positive or negative first derivative implies)
d) Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?.
e) Determinethe Marginal costand interpret the results.
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