Avoidable fixed cost of pizzas

Reference no: EM13914301

Dan loves pizza. His firm, Dan’s Pizza Company, makes frozen pizzas. The market price of a pizza is $15, and Dan is a price taker. His daily cost of making pizzas is C(Q) = 5Q + Q2/80, and his marginal cost is MC = 5 + Q/40.

(a) How many pizzas should Dan sell each day to maximize profit? What is his profit?

(b) How many pizzas should Dan sell each day to maximize profit, if he also has an avoidable fixed cost of $980 per day?

Reference no: EM13914301

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