The management of an ‘Electronic Goods’ manufacturing company asked you to give an advice about changing its current production plan, given the following information: - Annual production plan of computers is 4200 computers. - Total cost of production is OMR 824000. - Fixed cost is OMR 320000. - Revenue function: R = 460.2Q – 0.05Q2 1-Use the above information to formulate the price function and the total cost function, and determine the following: 1) Profit-maximizing quantity. 2) Profit-maximizing price. 3) Maximum profit value. 4) Revenue-maximizing quantity. 2-Should the company change its current annual production plan of computers in order to maximize its profit?
The management of an ‘Electronic Goods’ manufacturing company asked you to give an advice about changing its current production plan, given the following information: - Annual production plan of computers is 4200 computers. - Total cost of production is OMR 824000. - Fixed cost is OMR 320000. - Revenue function: R = 460.2Q – 0.05Q2 1-Use the above information to formulate the price function and the total cost function, and determine the following: 1) Profit-maximizing quantity. 2) Profit-maximizing price. 3) Maximum profit value. 4) Revenue-maximizing quantity. 2-Should the company change its current annual production plan of computers in order to maximize its profit?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q2.
The management of an ‘Electronic Goods’ manufacturing company asked you to give an advice about changing its current production plan, given the following information:
- Annual production plan of computers is 4200 computers.
- Total cost of production is OMR 824000.
- Fixed cost is OMR 320000.
- Revenue function: R = 460.2Q – 0.05Q2
1-Use the above information to formulate the
1) Profit-maximizing quantity.
2) Profit-maximizing price.
3) Maximum profit value.
4) Revenue-maximizing quantity.
2-Should the company change its current annual production plan of computers in order to maximize its profit?
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