Please answer #7
6. (10 pts.) Next year, after selling the excess product, you must factor into your pricing decision the production costs. The production manager of the firm estimates (also using linear regression) that the variable cost per unit is given by AVC=28-5.5Q+Q²
7. (15 pts.) What price should you charge to maximize profit? How much profit would this product generate in a year? What is the price elasticity of demand at this price?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!