(1) A company in Scotland bottles sparkling water. The fixed cost per month to produce bottled water is $35,000, and the variable cost is $0.2 per bottle. Price is related to demand according to the following equation: v = 4,000 – 1.1p Determine the optimal price using a nonlinear profit analysis.
(1) A company in Scotland bottles sparkling water. The fixed cost per month to produce bottled water is $35,000, and the variable cost is $0.2 per bottle. Price is related to demand according to the following equation: v = 4,000 – 1.1p Determine the optimal price using a nonlinear profit analysis.
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.4P
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![(1) A company in Scotland bottles sparkling water. The fixed cost per month to produce bottled water is
$35,000, and the variable cost is $0.2 per bottle. Price is related to demand according to the following
equation:
v = 4,000 – 1.1p
Determine the optimal price using a nonlinear profit analysis.
(2) A tailor on Savile Row is producing suits. The fixed cost per month producing suits is $13,000, and the
variable cost is $140 per suit. Price is related to demand, according to the following equation.
v = 600 – 1.5p
Determine the optimal price using a nonlinear profit analysis.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2cf04b54-5cc8-4350-9ba2-1c460e988462%2F0a887374-86a9-4cc6-82d9-11b1566ad62b%2Fmz5vu9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(1) A company in Scotland bottles sparkling water. The fixed cost per month to produce bottled water is
$35,000, and the variable cost is $0.2 per bottle. Price is related to demand according to the following
equation:
v = 4,000 – 1.1p
Determine the optimal price using a nonlinear profit analysis.
(2) A tailor on Savile Row is producing suits. The fixed cost per month producing suits is $13,000, and the
variable cost is $140 per suit. Price is related to demand, according to the following equation.
v = 600 – 1.5p
Determine the optimal price using a nonlinear profit analysis.
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