Given
3D=1680−3P
Fixed cost=1500
Variable cost=45
Rearrange
3D=1680−3D3P=1680−3DP=560−D
a)
Profit maximizing level
MR=MCTR=P×DTR=(560−D)D2MR=dDdTR=560−2DTC=1500+45DMC=dDdTC=45
Now MR=MC
560−2D=45560−45=2DD=257.5P=560−DP=560−257.5=302.5
Profit=TR-TC
TR=560D−D2=560(257.5)−(257.5×257.5)=144200−66306.25=77893.75
TC=1500+45D=1500+45(257.5)=1500+11.587.5=13087.5
Profit=77893.75−13087.5=64806.25
b)
Range=257.5−0.5=257257+0.5=258257−258
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