A manufacturer can produce at most 130 units of a certain product each year. The demand equation for the product is p =q² - 100q+4200 and the manufacturer's average-cost function is c=(2/3)q²-35q+(15000/q).Determine the profit-maximizing output q and the correspondinm maximum profit.

A manufacturer can produce at most 130 units of a certain product each year. The demand equation for the product is p =q² - 100q+4200 and the manufacturer's average-cost function is c=(2/3)q²-35q+(15000/q).Determine the profit-maximizing output q and the correspondinm maximum profit.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter3: Benefits, Costs, And Decisions

Section: Chapter Questions

Problem 8MC

See similar textbooks

Related questions

Q: Recently, an Internet service provider (ISP) in the United Kingdom implemented a “no-strings…

A: An internet service provider in United Kingdom implemented flat rate plan under this plan commercial…

Q: Is a Function of Price A company produces an electronic timing switch that is used in consumer and…

A: Answer: Note: we are strictly forbidden to provide handwritten solutions from the company side.…

Q: A company has a project for building and operating a new electricity generation station. The…

A: Total operation cost function is, C0=MHN5/3.Where Mis constant, H is operation hour and N is the…

Q: The Talbot Company uses electrical assemblies to produce an aray of small appliances. One of its…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Philippine Population 110M Urban Population 51.2% of PH Multi-unit Residential Population11.9% of…

A: Given, Total Philippines population =PH population = 110 million Urban population = U Population…

Q: A firm is planning to manufacture a new product. The sales department estimates that the quantity…

A: To maximize profit, that is the income minus the cost to be maximum the condition MR=MC should be…

Q: A company produces two types of solar panels per year: x thousand of type A and y thousand of type…

A: Answer: Given, Revenue function: Rx,y=3x+4y Cost function: Cx,y=x2-2xy+6y2+5x-28y-9 Profit= Revenue…

Q: A company produces a certain commodity. The labor and material cost for each item produced is P65.…

A: Let the number of units be x Therefore, Total labor and material cost = P65 * n Other variable cost…

Q: A separate server farm with advanced Al features is projected to bring in the following revenue ($M)…

A: Revenue: It refers to the profit earn by the firms within a specified period of time. The increase…

Q: You are hired as a consultant for Cool Zone Inc. The company currently has a 1-year contract for the…

A: Let us define cost functions for all the alternatives : Total Cost = Variable Cost + Fixed…

Q: The unit cost in peso to produce a chemically formulated product is $13 and the fixed cost is $370.…

A: The cost of production refers to the monetary value incurred on the factors of production to produce…

Q: Redleaf company's market research department works on the manufacture and marketing of a winter tire…

A: Given that : when price= $10 ;demand = 36,000 units when price = $15 ; demand = 34,000 units…

Q: The demand function for a manufacturer's product is D = 70-5p , where D is the number of units and…

A: Revenue maximisation is a strategic goal of a company that aims to offer at a rate that maximizes…

Q: The management of a manufacturing company has the following information: Revenue function: R 2700Q -…

A: Profit maximization condition is where MC= MR But revenu maximization condition where your Total…

Q: Mr. ABC bought a 2,000 sq meter land at a cost of P500,000. He leased the land to Mr. B Franco at an…

A: A Lease is referred to as a contractual agreement whereby the right to use an asset for a particular…

Q: Suppose that the demand for a product is 8000 unit per year, order cost is 500 $ and the inventory…

A: EOQ: It means the order quantity that minimizes the total holding costs and ordering costs.

Q: Suppose that KCA University intends to introduce a new course from September 2020. The college…

A: The total cost consists of total variable cost and total fixed costs. TC =VC+FCVC =AVC*Q Total…

Q: If the total revenue function R (x) = 10x + 0. then the expected revenue from the sale of 16th unit…

A: A market is the place where the buyers and the sellers interact with each other and the exchange of…

Q: Zyleron Corp. shows monthly fixed costs of RM 37,210 and a per-unit cost of RM 34.79. It sells 275…

A: Total fixed cost is the cost that remains the same over a period of time. It means as output rises…

Q: Graphically draw these two curves, labeling all relevant looking (such as intercepts for each line)…

A: Equilibrium will be at Qd = Qs 150-3P = P-10 - 4P = - 160 P = 160/4 = $40 Putting P in Qs Qs = 40 -…

Q: The management of a manufacturing company has the following information: Revenue function: R = 2700Q…

A: Profit maximization is one of the key goals of all the firms in a market. Profit is the difference…

Q: if a company has total costs C(x)=45000+45x+0.2x^2 and total revenue given by R(x)=635x-0.8x^2 find…

Q: The management of a manufacturing company has the following information: Revenue function: R = 3600Q…

A: R = P x Q = 3600Q - 25Q2 P = R/Q = 3600 - 25Q (i) When P = 2100, 3600 - 25Q = 2100 25Q = 1500 Q = 60…

Q: A manufacturing company produced 40,000 boxes of a product that sold for OMR 3 per box. The total…

A: Given: A company produced = 40,000 boxes The product sold for = OMR 3 per box The total variable…

Q: If company A manufactures t-shirts and sells them to retailers for US$9.80 each It has fixed costs…

A: Each shirt sold by company A at = $ 9.80 Fixed costs =$2625 Production cost per unit= $ 2.30 Demand…

Q: The demand function for a manufacturer's product is D = 70-5p, where D is the number of units and…

A: The demand refers to the total units of a particular good that consumers are able and willing to…

Q: of $8 per unit. Sales history indicates that the sales price in dollars, P, varies with the demand,…

A: here we determine the optimum demand and the maximum profit by following method given below;

Q: Continental Airlines operates in and out of many countries. Country A has a low inflation rate of 3%…

A: Inflation rate in country A : 3% Inflation rate in country B : 30 % Emergency fund = 1 million

Q: A senior buyer for Nike decided to order a men's shoe during a buyers meeting. The shoe will be a…

A: Given:Mean demand (d) = 700 pairs Standard deviation (S) = 300 pairs Selling price per pair (SP) =…

Q: Zyleron Corp. shows monthly fixed costs of RM 37,210 and a per-unit cost of RM 34.79. It sells 275…

A: Break even price are those price at which the firm earn only normal profit . Normal profit refers to…

Q: US-Mobile manufactures and sells two products, tablet computers (55% of sales) and smartphones (45%…

A: The breakeven point is the level of production at which a product's costs equal its revenues. The…

Q: M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates…

A: As we answer only 3 subparts and the question has more than 3 subparts, so we would be answering the…

Q: The management of a manufacturing company has the following information: Revenue function: R = 2700Q…

A: TR = 2700Q -15Q2 MR = 2700-30Q Profit-maximising price = 1500 TR = P*Q P = TR /Q P = 2700-15Q ,but…

Q: The owner of Mujur Café estimates that the café's revenue has grown exponentially represented by the…

A: Given the revenue function, R(t)=Cekt Now, the rate of growth of revenue function, R'(t)=dRdt=Ckekt

Q: The supply function for a product is given by p = 40 + 100V2x + 4, where x is the number of units…

Q: Consider the following data of a company for the year 1999: Sales = Rs. 1,20,000 Fixed cost = Rs.…

A: Use the below formulas to find the BEP. BEP = Fixed costP/V ratio P/V ratio = ContributionSales…

Q: The annual cost C (in thousands of dollars) and revenue R (in thousands of dollars) for a company…

A: We know that profit is the total revenue earned minus the total cost incurred by the producer. Thus,…

Q: After spending $10 million on research and development, the company Patronus, Inc. rolled out a new…

A: Given: Spending on Research and development=$10 million Direct sales=$8 million Sales to home…

Q: A Company purchased equipment that has two year warranty and AOC = $1500 per year, beginning in year…

A: GIven, Equipment has a two years warranty AOC (repair cost)= $1500 per year Interest rate = 9% =…

Q: A product that has a list price by the company to be 589 while the variable cost of manufacturing is…

A: Answer 1. At Breakeven, Total Cost = Fixed Cost + Variable Cost VC varies with the…

Q: The demand function for a certain product is determined by the fact that the product of the price…

A: Answer to the question is as follows :

Q: The order cost per order of an inventory is P400 with an annual carrying cost of P10 per unit. What…

A: Definition: Economic Order Quantity (EOQ) is a type of production formula used to decides the most…

Q: ISO 14001 can be applied to any organization in any sector. For instance, a public administration or…

A: 1 True ISO 14001:2015 can be used in any organization, and it would be regardless of any size, type…

Q: A perfume company manufactures a single product having a cost of OMR 1.50 per unit. Fixed cost is…

A: The break-even point is the point at which total cost and total revenue are equal, meaning there is…

Q: (b) What is the break-even sales in RM for an operation that sells 615 products at RM 17.50 if each…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: A cell phone factory has a total production cost of C - 150x+10000 and a revenue function R(x) -…

A: Total revenue is the revenue that is achieved by selling given units of a commodity. Total cost is…

Q: The input-output curve of a gas-fired generating unit is approximated by the following function:…

A: Given, Period 1 2 3 4 5 6 Price 12.5 10 13 13.5 15 11

Q: First Inc. currently grants no credit, but it is considering offering new credit terms of net 30. As…

A: Given that, Sales = 7,000 units + 600 units =7600 units Price = $35 Then, sales price =…

Q: The weekly revenue realized by a company is approximated by the revenue function R(x, y) = 200x +…

Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A company produces an electronic timing switch that is used in consumer and commercial products. The fixed cost is $70,000 per month and the variable cost is $80 per unit. If the selling price per unit is p = $170 − 0.01(D), calculate the following: a) The optimal volume for this product (Demand)? b) The value of selling price per unit at the optimal volume calculated in part a for this product ?
An apple grower has discovered a process for producing oranges that requires two inputs. The production function is Q = min{2x, y}, where x and y are the amounts of inputs 1 and 2 that he uses. The prices of these two inputs are wx = $5 and wy = $10, respectively. The minimum cost of producing 160 units is therefore:a. $2,400.b. $1,600c. $800.d. $2,000.e. $8,000. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
A company makes a product with a selling price of $20 per unit and variable costs of $ 8 per unit. The fixed costs for the period are $30762. What is the required output level to make a target profit of $15,000?
Many times, the selling price of a product, p, is related to the demand, D, according to the relationship p=a-bD. However, a company has found that the price of their product can be related to demand ( in units per year) according to the following equation: p= $88.5 – (0.5)D0.5 . In addition, there is a fixed cost of $20,000 per year and the variable cost to manufacture the product is $20 per unit. a. What level of demand maximizes total revenue and the maximum revenue? b. What level of demand maximizes total profit for this product and the maximum profit?
The demand function for a manufacturer's product is D = 91 - 9p , where D is the number of units and 'p' is the price per unit. The value of D that will achieve maximum revenue is _____ units.
Suppose the company lacks confidence in the accuracy of cost estimates expressed in a cubic equation and simply wants to use a linear approximation. Suggest a linear representation of this cubic equation. What difference would it make on the recommended profit-maximizing and revenue-maximizing prices
XYZ manufacturing company a manufacturer of Scientific calculators. According to it records, costs that do not vary with the number of calculators, Q produced is $1200. Variable cost per unit of calculator produced is $2. The company’s maximum capacity is 1400 units. XYZ’s total revenue, TR function has been postulated as q TR=100 . (A) Q Specify the mathematical form of the total cost, TC function. (B) (C) (D) (E) Determine the break-even quantity algebraically. Graph the revenue and costs functions. Clearly indicate the portion of the graph where the company make losses or profits. Calculate the total contribution margin, TCM at Q = 600. Comment on the value. Should XYZ produce the up to the maximum capacity? Explain? Please I need solution for only subpart D and E
XYZ manufacturing company a manufacturer of Scientific calculators. According to it records, costs that do not vary with the number of calculators, Q produced is $1200. Variable cost per unit of calculator produced is $2. The company’s maximum capacity is 1400 units. XYZ’s total revenue, TR function has been postulated as q TR=100 . (A) Q Specify the mathematical form of the total cost, TC function. (B) (C) (D) (E) Determine the break-even quantity algebraically. Graph the revenue and costs functions. Clearly indicate the portion of the graph where the company make losses or profits. Calculate the total contribution margin, TCM at Q = 600. Comment on the value. Should XYZ produce the up to the maximum capacity? Explain?
The order cost per order of an inventory is P400 with an annual carrying cost of P10 per unit. What is the Economic order quantity for an annual demand of 2,000 units?
The profit,P,of a company that manufactures and sells N units of a certain product is modeled by the function P(N)=R(N)-C(N) The revenue function,R(N)=S·N, is the selling price S per unit times the number N of units sold. The company's cost,C(N)= Co +Cop(N), is a sum of two terms. The first is a constant Co describing the initial investment needed to set up production. The other term, Cop(N), varies depending on how many units the company produces, and represents the operating costs. Companies care not only about profit, but also marginal profit, the rate of change of profit with respect to N. Assume that S=$50,Co=$75,000, Cop(N)=$50✓N,and that the company currently sells N= 100 units. Compute the marginal profit at this rate of production.Round your answer to one decimal place.
You are setting up a part-time business with an initial investment of $15,000. The unitcost of the product is $11.80, and the selling price is $19.30.a) Find equations for the total cost C and total revenue R for x units.b) Find the break-even point by finding the point of intersection of the cost and revenueequations.c) How many units would yield a profit of $1000?
A company produces and sells luxury goods and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be: p=10-(42/D^2)+2Dwhere p is the price per unit in million dollars and D is the demand per year. The company is seeking to maximize its profit. The fixed cost is $59 million per year and the variable cost is $25 million per unit. The production capacity is 42 units per year, and the company produces at least 1 unit per month. 1) What is the company’s range of profitable output per year?