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    Profit Determination Project

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    Woodland Instruments, Inc. operates in the highly competitive electronics industry. Prices for its R2-D2 control switches are stable at $100 each. This means that P = MR = $100 in this market. Engineering estimates indicate that relevant marginal cost relations for the R2-D2 model are: MC= $25 + $0.005Q.

    Calculate the output level that will maximize R2-D2 profit.

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    Please see the response as below.

    In highly competitive market P = MR. The profit ...

    Solution Summary

    The solution shows the output level that will maximize profit.