AVX makes and sells a single product Z. The selling price and marginal revenue equations for product Z are as follows: Selling price- 230-0.025x Marginal revenue-230-0.05x The variable costs are E40 per unit and the foxed costs are £135.000. If the selling price was set to maximise revenue, calculate the resulting 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
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
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AVX makes and sells a single product Z. The selling price and marginal revenue equations for product Z are as follows:
Selling price- 230o-0.025x
Marginal revenue - 230-0.05x
The variable costs are E40 per unit and the fixed costs are £135,000.
If the selling price was set to maximise revenue, calculate the resulting profit.
Please type your answer (including your workings) in the box below.
Please use the arrow keys on your keyboard to scroll up and down within the text box (as using the mouse may not work).
Transcribed Image Text:AVX makes and sells a single product Z. The selling price and marginal revenue equations for product Z are as follows: Selling price- 230o-0.025x Marginal revenue - 230-0.05x The variable costs are E40 per unit and the fixed costs are £135,000. If the selling price was set to maximise revenue, calculate the resulting profit. Please type your answer (including your workings) in the box below. Please use the arrow keys on your keyboard to scroll up and down within the text box (as using the mouse may not work).
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