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Allied Box offers mail-order storage containers for fine china producers. The company is the low-cost provider of these boxes with fixed cost of $480,000 per year, plus variable cost of $30.00 for each box. Annual demand and marginal revenue functions for the company are:P = $70 - $0.0005QMR = dTR/dQ = $70 - $0.001Q
A.- Calculate the profit-maximizing activity level.B.- Calculate the company's optimal profit and return on sales levels.C.- What would you do if you found that your profit margins were too low and your position as a cost leader were threatened?.
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