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Determine the optimal price of product

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Reference no: EM1372164

1. After a 10 percent price discount, a company found that its weekly sales increased by 30 percent. If the marginal cost (MC) of this product is $40 each, determine the optimal price for this product?

2. Suppose the total cost equation for a competitive firm is given by:
TC=1,000+ 10Q -2Q^2 + 0.5Q^3
(A) At what output is the average variable cost (AVC) at a minimum?

(B) If the market price of the firm's output is $7.5 per unit, should the firm produce or shut down?

 

Reference no: EM1372164

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