A firm is planning to manufacture a new product.The sales
Chapter , Problem 1-66(choose chapter or problem)
A firm is planning to manufacture a new product.The sales department estimates that the quantity thatcan be sold depends on the selling price. As the sell-ing price is increased, the quantity that can be solddecreases. Numerically they estimate:P=$35.000.02QwhereP=selling price per unitQ=quantity sold per yearOn the other hand, management estimates thatthe average cost of manufacturing and selling the product will decrease as the quantity sold increases.They estimateC=$4.00Q+$8000whereC=cost to produce and sellQper yearThe firms management wishes to produce andsell the product at the rate that will maximize profit,that is, income minus cost will be a maximum. Whatquantity should the decision makers plan to produceand sell each year?
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