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    The Zinger Company: Total Profit at Optimal Level

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    The Zinger Company manufactures and sells a line of sewing machines. Demand per period (Q) for a particular model is given by the following relationship:
    Q = 400 - .5P
    where P is price. Total costs (including a "normal" return to the owners) of producing Q units per period are:
    TC = 20,000 + 50Q + 3Q2. What are total profits at the optimum level of output for Zinger Company?

    a. $81,250

    b. $812.50

    c. $8,125

    d. $812,500

    © BrainMass Inc. brainmass.com October 9, 2019, 6:06 pm ad1c9bdddf

    Solution Preview

    Q = 400-0.5P, rearranging this equation in terms of Q we get
    P = 800 - 2Q

    TR = P*Q
    TR = 800Q - 2Q2

    Marginal revenue is the first ...

    Solution Summary

    Solution contains answer and explanation of a MCQ.