A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be p = 38+ where p is the price per unit in dollars and D is the demand per month. The company is seeking to maximize its profit. The fixed cost is $1,000 per month and the variable cost is $40 per unit. The production capacity is 100 units per month, and the company produces at least 1 unit per month. c) What is the breakeven point? d) What is the company's range of profitable output? 2700 5200 D D²
A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price. The relationship between price and demand is found to be p = 38+ where p is the price per unit in dollars and D is the demand per month. The company is seeking to maximize its profit. The fixed cost is $1,000 per month and the variable cost is $40 per unit. The production capacity is 100 units per month, and the company produces at least 1 unit per month. c) What is the breakeven point? d) What is the company's range of profitable output? 2700 5200 D D²
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A company produces and sells a consumer product and is able to control the demand for the
product by varying the selling price. The relationship between price and demand is found to be
p = 38+
c)
d)
2700
D
5200
D²
where p is the price per unit in dollars and D is the demand per month. The company is seeking to
maximize its profit. The fixed cost is $1,000 per month and the variable cost is $40 per unit. The
production capacity is 100 units per month, and the company produces at least 1 unit per month.
What is the breakeven point?
What is the company's range of profitable output?
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