A company produces and sells hair dryers in a market where price (p) and demand (D) are related follows: p = $35 + (3,000)/D- (4,800)/D² The fixed cost (C;) is $800 per month and the variable cost per hair dryer (c.) is $38. With reference to the company in Question 1, assume price and demand are unrelated. The company sells the hair dryers for $80 each if they spend $8,000 per month on advertising (C.). C; and c, remain as indicated in Question 1. The maximum production capacity is 5,000 hair dryers per month. a) What is the demand breakeven point?

A company produces and sells hair dryers in a market where price (p) and demand (D) are related follows: p = $35 + (3,000)/D- (4,800)/D² The fixed cost (C;) is $800 per month and the variable cost per hair dryer (c.) is $38. With reference to the company in Question 1, assume price and demand are unrelated. The company sells the hair dryers for $80 each if they spend $8,000 per month on advertising (C.). C; and c, remain as indicated in Question 1. The maximum production capacity is 5,000 hair dryers per month. a) What is the demand breakeven point?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 3CQQ

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