A company produces and sells a consumer product and is able to control the demand by varying the selling price. The approximate relationship between price and demand is p=45 + 2700/D - 5000/D2 for D > 1 The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $38 per unit. What is the number of units that should be produced and sold each month to maximize profit?

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 20AA
icon
Related questions
Question

Round off your final answer to whole #.

 

A company produces and sells a consumer product and is able

to control the demand by varying the selling price. The approximate relationship between price and demand is

p=45 + 2700/D - 5000/D2 for D > 1

The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $38 per unit.

What is the number of units that should be produced and sold each month to maximize profit?

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Savings
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
Economics
ISBN:
9780078747663
Author:
McGraw-Hill
Publisher:
Glencoe/McGraw-Hill School Pub Co
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning