1. A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $600,000 per month. The variable cost per thousand board feet is $125.50. The price charged will be determined by p = $550 - (0.4)D per 1.00 board feet. a. For this situation, determine the optimal monthly sales volume for this product and calculate the profit (or loss) at the optimal volume. b. What is the domain of profitable demand during a month?

1. A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of plywood is $600,000 per month. The variable cost per thousand board feet is $125.50. The price charged will be determined by p = $550 - (0.4)D per 1.00 board feet. a. For this situation, determine the optimal monthly sales volume for this product and calculate the profit (or loss) at the optimal volume. b. What is the domain of profitable demand during a month?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 6SQ

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