Redleaf company's market research department works on the manufacture and marketing of a winter tire for vehicles. Currently the price is 10$, and the demand is 36000 units. When the price is increased to 15$, the company expects the demand to be 34000 units (assume that price is linearly related to demand.). Company is following a make-to-order policy for their production, meaning that they make production as much as ordered from their dealers. The dealers make orders 3 times a year, on January, May and September. The company has 23 dealers, who do not have any capacity restriction on their orders. Yet, the above information is a country- wise research, and shows the aggregate demand (sum of all dealers' orders) for each price. Regardless of the production amount, the company faces with a 4690$ of administrative cost for production, in addition to 1,5 $ cost of raw materials and labour costs per each units produced. Which of the following presents the correct marginal profit function, if d is demand and p is price? O a. MP(p) = ((8,500p - 0,001 p^2)*23)/3 O b. MP = p %3D O . MP(d) = 98,500 - 0,005 d %3D O d. MP(d) = 98,500d - 0,005 d^2 %3D O e. MP(p) = 8,500p - 0,001 p^2 %3D

Redleaf company's market research department works on the manufacture and marketing of a winter tire for vehicles. Currently the price is 10$, and the demand is 36000 units. When the price is increased to 15$, the company expects the demand to be 34000 units (assume that price is linearly related to demand.). Company is following a make-to-order policy for their production, meaning that they make production as much as ordered from their dealers. The dealers make orders 3 times a year, on January, May and September. The company has 23 dealers, who do not have any capacity restriction on their orders. Yet, the above information is a country- wise research, and shows the aggregate demand (sum of all dealers' orders) for each price. Regardless of the production amount, the company faces with a 4690$ of administrative cost for production, in addition to 1,5 $ cost of raw materials and labour costs per each units produced. Which of the following presents the correct marginal profit function, if d is demand and p is price? O a. MP(p) = ((8,500p - 0,001 p^2)*23)/3 O b. MP = p %3D O . MP(d) = 98,500 - 0,005 d %3D O d. MP(d) = 98,500d - 0,005 d^2 %3D O e. MP(p) = 8,500p - 0,001 p^2 %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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