A medium sized scale company manufactures a certain product with an estimated variable costs,per unit, v 36Q - 14400 and an aggregated fixed costs of $81000. The price-quantity demandrelationship for this product is P=-0.27Q+270, where P is the unit sales price of the productand Q is the annual quantity demand.• Total cost = Fixed cost + Variable cost• Revenue Quantity Demand x Price•Profit = Revenue - Total costa) Develop the equations for total cost and total revenue.b) Find the breakeven quantity.c) What profit is earned if i) total cost is minimized and ii) total revenue is maximized?d) Which of the strategy will be better for the company to adopt to optimize their profit, isit to minimize total cost or maximize total revenue. Give reason for your choicee) What is the company's maximum possible profit?

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A medium sized scale company manufactures a certain product with an estimated variable costs, per unit, v 36Q- 14400 and an aggregated fixed costs of $81000. The price-quantity demand relationship for this product is P=-0.27Q+270, where P is the unit sales price of the product and Q is the annual quantity demand. • Total cost=Fixed cost+ Variable cost • Revenue Quantity Demand x Price •Profit = Revenue - Total cost %3D a) Develop the equations for total cost and total revenue. b) Find the breakeven quantity. c) What profit is earned ifi) total cost is minimized and ii) total revenue is maximized?

A medium sized scale company manufactures a certain product with an estimated variable costs, per unit, v 36Q- 14400 and an aggregated fixed costs of $81000. The price-quantity demand relationship for this product is P=-0.27Q+270, where P is the unit sales price of the product and Q is the annual quantity demand. • Total cost=Fixed cost+ Variable cost • Revenue Quantity Demand x Price •Profit = Revenue - Total cost %3D a) Develop the equations for total cost and total revenue. b) Find the breakeven quantity. c) What profit is earned ifi) total cost is minimized and ii) total revenue is maximized?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 2E

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