The profit associated with the production and sale of a product is the difference between the product's revenue and the co (A) The cost to produce the Rolls-Royce can be estimated at $270 million of fixed costs (factory maintenance, equipment leasing. labor, etc) plus $110000 per vehicle. Write profit P, in thousands of dollars, as a formula involving the price per vehicie, p (in thousands of dolarsi, and q the quanti vehicles produced: (b) in 2011, Rols-Royce sold 3538 cars at an average price per vehicie of $200 thousand. Assume that the demand for these vehicies is proportional the price, p, in thousands of dollars, and write a formula for the quantity of Rolls-Royce vehicies demanded as a function of p. q- D(p) = (a Use the demand model from part (b) to rewite your profit formula trom part (a) so that P is a function of only p. P(p) = (d) At what price does the model predict break even is attained? thousand dollars Price: (e) What is the value of profit at the vertex of the quadratic? Note: This is not the company's maximum profit Why? thousand dollars Maximum

The profit associated with the production and sale of a product is the difference between the product's revenue and the co (A) The cost to produce the Rolls-Royce can be estimated at $270 million of fixed costs (factory maintenance, equipment leasing. labor, etc) plus $110000 per vehicle. Write profit P, in thousands of dollars, as a formula involving the price per vehicie, p (in thousands of dolarsi, and q the quanti vehicles produced: (b) in 2011, Rols-Royce sold 3538 cars at an average price per vehicie of $200 thousand. Assume that the demand for these vehicies is proportional the price, p, in thousands of dollars, and write a formula for the quantity of Rolls-Royce vehicies demanded as a function of p. q- D(p) = (a Use the demand model from part (b) to rewite your profit formula trom part (a) so that P is a function of only p. P(p) = (d) At what price does the model predict break even is attained? thousand dollars Price: (e) What is the value of profit at the vertex of the quadratic? Note: This is not the company's maximum profit Why? thousand dollars Maximum

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

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