This solution answer question to find all the cost and plot them on a graph.
Calculate output, price, total revenue, and total profit at the revenue maximizing...
Please answer A, B & C.
Dyna-Rubber, Inc. man manufactures a high-performance tire called Sport 70. Fixed development cost for the current year is $600,000. Marginal costs for manufacturing and distribution are $63 per tire. Based on recent sales experience, the estimated demand curve and marginal revenue relations for Sports 70 are:
P = $130 - $0.000125Q
MR = $130 - 0.00025Q
A. Calculate output, price, total revenue, and total profit at the revenue maximizing
activity level (present your answer with relevant diagrams too)
B. Calculate output, price, total revenue, and total profit at profit maximizing activity level
(again also with diagrams).
C. Compare and discuss our answers in part A and B.View Full Posting Details