Firm K Is a Leading Maker of Light-Weight, Water-Proof Outerwear

question 30

Essay

Firm K is a leading maker of light-weight, water-proof outerwear. During the winter months, demand for its main line of water-proof coats is given by: P = 800 - 0.2Q, where P denotes price in dollars and Q is quantity of units sold per month. The firm produces coats in a single plant (which it leases by the year). The total monthly cost of producing these coats is estimated to be: C = 150,000 + 400Q. Leasing the plant accounts for almost all of the $150,000 fixed cost. What is the firm's marginal cost? Find the firm's profit-maximizing output and price. If the firm's other outerwear products generate $50,000 in contribution, what is the firm's total monthly profit?

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Definitions:

Security

Measures and protocols implemented to protect information, networks, computers, and data from unauthorized access, attacks, or damage.

Roaming

The ability for a wireless device to operate on another company's network when traveling away from the home network's coverage area.

Mobile Wallets

Digital versions of traditional wallets that someone can have on their smartphones, where they can store various payment information and other credentials for making transactions.

NFC

Near Field Communication, a wireless technology allowing for short-range communication between compatible devices.