Dalahla Company Limited, focusing on producing tooth paste (in units) has a demand function 4Q = 35 − 0.5P. If total fixed cost is GH¢80 and average variable cost per unit function is 3Q −51 + 320/Q Where Q, is number of tooth paste produced and P is the price per tooth paste (in GH¢). What is the total profit at the profit maximizing level of output, and what is the best pricing policy option?

Dalahla Company Limited, focusing on producing tooth paste (in units) has a demand function 4Q = 35 − 0.5P. If total fixed cost is GH¢80 and average variable cost per unit function is 3Q −51 + 320/Q Where Q, is number of tooth paste produced and P is the price per tooth paste (in GH¢). What is the total profit at the profit maximizing level of output, and what is the best pricing policy option?

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

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 3MC

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Dalahla Company Limited, focusing on producing tooth paste (in units) has a demand function4? = 35 − 0.5?. If total fixed cost is GH¢80 and average variable cost per unit function is 3? −51+325/Q, where Q is number of tooth paste produced and P is the price per tooth paste (in GH¢).What is the total profit at the profit maximizing level of output, and what is the best pricing policyoption?
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