The Rainwater Brewery produces beer. The annual fixed cost is $150,000, and the variable cost per barrel is $16. Price is related to demand, according to the following linear equation: v = 75,000 - 1,153.8p Develop the nonlinear profit function for the brewery and determine the price that will maximize profit, the optimal volume, and the maximum profit per year.
The Rainwater Brewery produces beer. The annual fixed cost is $150,000, and the variable cost per barrel is $16. Price is related to demand, according to the following linear equation: v = 75,000 - 1,153.8p Develop the nonlinear profit function for the brewery and determine the price that will maximize profit, the optimal volume, and the maximum profit per year.
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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The Rainwater Brewery produces beer. The annual fixed cost is $150,000, and the variable cost
per barrel is $16. Price is related to
profit, the optimal volume, and the maximum profit per year.
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