An exporter of handbags has just entered a new market. This exporter faces the following relationship between the price of handbags and the demand for them: 4,800 3,000 P=5+ D -, D>0 D2 where P is the price per unit and D is the demand per month. The exporter wants to maximize his profit. The fixed cost is P2,000 per month and the variable cost P35 per unit. How many handbags should be produced and sold each month, in order to maximize profit?

An exporter of handbags has just entered a new market. This exporter faces the following relationship between the price of handbags and the demand for them: 4,800 3,000 P=5+ D -, D>0 D2 where P is the price per unit and D is the demand per month. The exporter wants to maximize his profit. The fixed cost is P2,000 per month and the variable cost P35 per unit. How many handbags should be produced and sold each month, in order to maximize profit?

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

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 2.5CE

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