12. Mr. Farmer has been in the business of selling cheddar cheese for almost three years, and thus far has been able to control the volume of the product by varying the selling price. He is seeking to maximize its net profit. It has been concluded that the relationship between price and demand per month is approximately D = 2500 - 10p, where p is the price per unit in dollars. The fixed cost is $ 1,100 per month, and the variable cost is $ 15 per unit. What is the optimal no. of units that should be produced and sold per month? What is the maximum profit per month? What are the breakeven sales quantities (range of profitable demand) ?

12. Mr. Farmer has been in the business of selling cheddar cheese for almost three years, and thus far has been able to control the volume of the product by varying the selling price. He is seeking to maximize its net profit. It has been concluded that the relationship between price and demand per month is approximately D = 2500 - 10p, where p is the price per unit in dollars. The fixed cost is $ 1,100 per month, and the variable cost is $ 15 per unit. What is the optimal no. of units that should be produced and sold per month? What is the maximum profit per month? What are the breakeven sales quantities (range of profitable demand) ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A hair salon offers three services: haircuts, color treatments, and styling. The salon charges $35 for a cut, $65 for a color treatment, and $30 for styling. Last month, the salon sold 68 haircuts, 34 color treatments, and 22 styling sessions. If the salon s costs for the month totaled $2,844, what was its profit? $2,407 $2,406 $2,408 $2,409
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(1). derive and sketch the optimization condition for profit maximization.
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