Question

In: Economics

Use the following information for Problems 10-14:  A company produces and sells a product with a monthly...

  1. Use the following information for Problems 10-14:  A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.

    The profit-maximizing quantity is _______________.

    A.

    155
    B.

    195
    C.

    200
    D.

    245
    E.

    None of the above

  2. Use the following information for Problems 10-14:  A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.

    Price = __________ at the profit-maximizing quantity.

    A.

    $45
    B.

    $60
    C.

    $35
    D.

    $52
    E.

    None of the above

  3. Use the following information for Problems 10-14:  A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.

    Total Revenue is __________ at the profit-maximizing price and quantity.

    A.

    $14,050
    B.

    $12,000
    C.

    $13,575
    D.

    $11,505
    E.

    None of the above

  4. Use the following information for Problems 10-14:  A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.

    Total Cost is ___________ at the profit-maximizing price and quantity.

    A.

    $2025
    B.

    $1705
    C.

    $2950
    D.

    $5000
    E.

    None of the above

  5. Use the following information for Problems 10-14:  A company produces and sells a product with a monthly demand estimated to be Q = 500 - 5P, where P is the selling price per unit in dollars. The fixed cost of production is $1,000 per month and the variable cost of production is $20 per unit.

    Profit is __________ at the profit-maximizing price and quantity.

    A.

    $7000
    B.

    $6500
    C.

    $5850
    D.

    $6250
    E.

    None of the above

Solutions

Expert Solution

Sol

a) Profit maximizing output = 200

b) Price at max profit output = $60

C) TR = $12000

d) TC = $5000

e) Profit = $7000/-

Rahul Sunny answered 3 years ago
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