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    optimal profit and return

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    QPL offers mail-order storage containers for fine china. The co is the low cost provider of these quilted boxes with fixed costs of $480000per year, plus variable costs of $30per box. Annual demand and marginal revenue relations for the co. are:
    P=$70 - $0.0005; MR=dTR/dQ = $70-$0.001Q
    A. Calculate the profit maximizing aactivity level.
    B.Calculate the co.'s optimal profit and return on sales levels.
    please show steps.

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    Solution Preview

    I doubt if the demand function should be P=$70 - 0.0005Q
    Then MR= 70-0.001Q
    We write total cost function:
    TC=Fixed ...

    Solution Summary

    The expert calculates the optimal profit and return on sales levels.