A company estimates that it can sell 2,000 units each month of its product if it prices each unit at $65. However, its monthly number of sales will increase by 10 units for each $0.20 decrease in price. The company has fixed costs of $450. The cost to make each unit is $4.50. Find the level of production that maximizes the company's profit. They should produce units at a price of $ which will yield a profit of $

A company estimates that it can sell 2,000 units each month of its product if it prices each unit at $65. However, its monthly number of sales will increase by 10 units for each $0.20 decrease in price. The company has fixed costs of $450. The cost to make each unit is $4.50. Find the level of production that maximizes the company's profit. They should produce units at a price of $ which will yield a profit of $

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.1IP

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