A company is planning to manufactureand market a new two-slice electric toaster. After conducting extensive market surveys, the research department provides the following estimates: a weekly demand of 200 toasters at a price of $16 per toaster and a weekly demandof 300 toasters at a price of $14 per toaster. The financial department estimates that weekly fixed costs will be $1,400and variable costs (cost per unit) will be $4. a)Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b)Using your knowledge from Finite Math, determine the Revenue functionin terms of ?. c)Determine the Marginal Revenu eat 2 different production levelsfor example 350 and 600 units. Interpret these results.(HINT: Consider what a positive or negative first derivative implies) d)Assume that the cost function is linear. Use the financialdepartment’s estimates to express the cost function interms of ?. e)Determinethe Marginal costand interpret the results. f)Explain why performing Marginal Analysis will help the company to make good business decisions.(Approximately 250 words)
A company is planning to manufactureand market a new two-slice electric toaster. After conducting extensive market surveys, the research department provides the following estimates: a weekly
a)Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function.
b)Using your knowledge from Finite Math, determine the Revenue functionin terms of ?.
c)Determine the Marginal Revenu eat 2 different production levelsfor example 350 and 600 units. Interpret these results.(HINT: Consider what a positive or negative first derivative implies)
d)Assume that the cost function is linear. Use the financialdepartment’s estimates to express the cost function interms of ?.
e)Determinethe Marginal costand interpret the results.
f)Explain why performing Marginal Analysis will help the company to make good business decisions.(Approximately 250 words)
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