Explore BrainMass

Explore BrainMass

    optimal profit and return

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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.

    © BrainMass Inc. brainmass.com December 24, 2021, 4:57 pm ad1c9bdddf

    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.