of $8 per unit. Sales history indicates that the sales price in dollars, P, varies with the demand, D, by the function: P= 200- 0.1D Determine the following: Optimum demand for the widgets. Maximum profit that can be made. Determine the range of demands for which the company is profitable.

of $8 per unit. Sales history indicates that the sales price in dollars, P, varies with the demand, D, by the function: P= 200- 0.1D Determine the following: Optimum demand for the widgets. Maximum profit that can be made. Determine the range of demands for which the company is profitable.

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 5E

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Question

A manufacturing company produces ACME Standard Widgets having a fixed cost of $50 and variable cost
of $8 per unit. Sales history indicates that the sales price in dollars, P, varies with the demand, D, by the
function:
P = 200 - 0.1D
Determine the following:
Optimum demand for the widgets.
Maximum profit that can be made.
Determine the range of demands for which the company is profitable.

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