Given that the relationship between the sales price for one of a company's products and the quantity sold per month is D = 500 – 5p units where D is the demand or quantity sold per month and p is the unit price in dollars. The fixed cost is $1,000 per month, andthe variable cost is $20 per unit produced. (a) Determine the optimal number of units that should be produced and sold per month. (b) What is the maximum profit per month related to the product? (c) What is the company's range of profitable demand? Supportyour answers graphically.

Total revenue is the amount earned in monetary terms after the sales of all the quantities at the…

Answered: Given that the relationship between the…

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter4: Economic Evaluation In Health Care

Section: Chapter Questions

Problem 7QAP

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A factory manager is planning for the manufacture of plywood to be sold overseas. The fixed cost of operation is estimated at $800,000 per month while the variable cost is $155 per thousand board feet of plywood. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per thousand board feet, p = $600 – 0.05D, where D is the amount produced and sold in thousands of board feet. Determine the monthly production that will maximize the total profit and corresponsding price. Dettermine also the corresponding maximum profit per month. A) For maximum profit, (to the nearest unit) thousands of board feet per month must be produced and sold at per thousand board feet of plywood.(Round to the nearest cent.) B) The maximum profit per month is equal to $
A company has established that the relationship between the sales price for one of its products and the quantity sold per month is approximately p = 79 – 0.11D units. The fixed cost is $800 per month and the variable cost $32 per unit produced. What number of units, D*,should be produced per month and sold to maximize the profit per month related to the product?
Given that the relationship between the sales price for one of a company’s products and the quantity sold per month is D = 500 – 5p units where D is the demand or quantity sold per month and p is the unit price in dollars. The fixed cost is $1,000 per month, and the variable cost is $20 per unit produced. (a) Determine the optimal number of units that should be produced and sold per month. (b) What is the maximum profit per month related to the product? (c) What is the company’s range of profitable demand? Support your answers graphically.
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all average cost can be calculated by deriving the per unit cost. True or False
A factory manager is planning for the manufacture of plywood to be sold overseas. The fixed cost of operation is estimated at $800,000 per month while the variable cost is $155 per thousand board feet of plywood. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per thousand board feet, p = $600 – 0.05D, where D is the amount produced and sold in thousands of board feet. Determine the range of profitable production. For profitable production, production must be at least thousands of board feet per month, but not more than (Round to the nearest unit.)
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