Product X is sold for $500 per unit. The total cost of production per year, including capital recovery and a return, is given by the expression TC = 0.04n3 − 700n + 50, 000 where n is the number of units sold. If TC represents the total of all fixed and variable costs, determine the following: a. The value of n that maximizes profit. b. The maximum profit for a year. c. The fixed cost per year.

Product X is sold for $500 per unit. The total cost of production per year, including capital recovery and a return, is given by the expression TC = 0.04n3 − 700n + 50, 000 where n is the number of units sold. If TC represents the total of all fixed and variable costs, determine the following: a. The value of n that maximizes profit. b. The maximum profit for a year. c. The fixed cost per year.

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

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 8MC

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