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.
I doubt if the demand function should be P=$70 - 0.0005Q
Then MR= 70-0.001Q
We write total cost function:
The expert calculates the optimal profit and return on sales levels.