A manufacturer of dishwashers is preparing to set the price on a new design. Demand is thought to depend on the price and is represented by   D = 2100 – 4.3P   The accounting department estimates that the total costs can be represented by   C = 4840 + 6.2D   (a) Develop a model for the total profit in terms of the price, P. (b) What will be the total profit if the price is $380.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1E
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A manufacturer of dishwashers is preparing to set the price on a new design. Demand is thought to depend on the price and is represented by

 

D = 2100 – 4.3P

 

The accounting department estimates that the total costs can be represented by

 

C = 4840 + 6.2D

 

(a) Develop a model for the total profit in terms of the price, P.

(b) What will be the total profit if the price is $380.

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