In a firm which manufactures wooden tables, it is estimated that its total revenue function is as follows: TR = 165Q – 5Q². Also, variable costs are estimated to be £5.00 per unit (Q) and the fixed costs will be £300 per week. a. Using breakeven analysis, derive the cost and profit functions. b. Calculate the maximum profit that can be obtained, stating the number of sales units and the selling price necessary to achieve this profit. c. Graph the profit function. Clearly indicate the roots and a maximum/minimum point where appropriate.

In a firm which manufactures wooden tables, it is estimated that its total revenue function is as follows: TR = 165Q – 5Q². Also, variable costs are estimated to be £5.00 per unit (Q) and the fixed costs will be £300 per week. a. Using breakeven analysis, derive the cost and profit functions. b. Calculate the maximum profit that can be obtained, stating the number of sales units and the selling price necessary to achieve this profit. c. Graph the profit function. Clearly indicate the roots and a maximum/minimum point where appropriate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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