Compute total profits at the optimum level of output/ Managerial Economics
The Zinger Corporation manufactures and sells a line of sewing machines. Demand per period for a particular model is given by the following relationship:
Q = 400 – .5P
where P is price. Total costs (including a “normal” return to the owners) of producing Q units per period are:
TC = 20,000 + 50Q + 3Q2. What are total profits at the optimum level of output for Zinger Company?
a. $81,250
b. $812.50
c. $8,125
d. $812,500
