The Hickory Cabinet and Furniture Company makes chairs. The fixed cost per month of making chairs is $7,500, and the variable cost per chair is $40. Price is related to demand, according to the following linear equation: v = 400 - 1.2p Develop the nonlinear profit function for this company and determine the price that will maximize profit, the optimal volume, and the maximum profit per month.

The Hickory Cabinet and Furniture Company makes chairs. The fixed cost per month of making chairs is $7,500, and the variable cost per chair is $40. Price is related to demand, according to the following linear equation: v = 400 - 1.2p Develop the nonlinear profit function for this company and determine the price that will maximize profit, the optimal volume, and the maximum profit per month.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.4P

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