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Explain why profits am or are not being maximized

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Question a. As the head of Manufacturing, how many boots will you manufacture if given the discretion to set production levels? Show calculations to support your answer.

Question b. If you managed the M&S Division of Warm Boots, and given the production level (and  its resulting average cost) chosen by the Manufacturing manager in part a, what price (and  quantity level) would you choose for a pair of boots that maximizes your bonus? Show
calculations to support your answer.

Question c. Given the decisions of the Manufacturing and M&S managers in parts (a) and (b), is the firm maximizing profits? Explain why profits am or are not being maximized.

Reference no: EM132448870

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