A division of Chapman Corporation manufactures a pager. The weekly fixed cost for the division is $20,000 and the variable cost
for producing x pagers per week is V (x )space equals space 50 x minus.01 x squared plus 0.000001 x cubed dollars. The company sells pagers at a price, 0 space less or equal than x space less or equal than 7500 p (x )space equals space 150 minus.02 x Find the level of production that will yield a maximum profit for the manufacturer
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Answer:
Answer for the question:
A division of Chapman Corporation manufactures a pager. The weekly fixed cost for the division is $20,000 and the variable cost for producing x pagers per week is V (x )space equals space 50 x minus.01 x squared plus 0.000001 x cubed dollars. The company sells pagers at a price, 0 space less or equal than x space less or equal than 7500 p (x )space equals space 150 minus.02 x Find the level of production that will yield a maximum profit for the manufacturer
Is given in the attachment.
Explanation:
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Answer:
Price elasticity of demand = 10.21
Explanation:
Given:
Old income (P0) = $31,900
New income (P1) = $33,500
Old Quantity (Q0) = 3 times
New Quantity (Q1) = 5 times
Computation of Price elasticity of demand :
Midpoint method:
Price elasticity of demand =
Price elasticity of demand = 10.21