The Total Weekly Profit (In Dollars) Realized by Country Workshop

question 192

Multiple Choice

The total weekly profit (in dollars) realized by Country Workshop in manufacturing and selling its rolltop desks is given by the profit function where x stands for the number of finished units and y denotes the number of unfinished units manufactured and sold each week.The company's management decides to restrict the manufacture of these desks to a total of exactly 100 units/week.How many finished and how many unfinished units should be manufactured each week to maximize the company's weekly profit?

• A)80 finished and 20 unfinished units
• B)70 finished and 30 unfinished units
• C)60 finished and 40 unfinished units
• D)110 finished and -10 unfinished units

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Definitions:

Cost-output Elasticity

The ratio of the percentage change in cost relative to the percentage change in output, indicating how costs change with output levels.

Marginal Cost

The cost associated with producing one additional unit of a product.

Technological Change

Development of new technologies allowing factors of production to be used more effectively.

Isoquant

A curve representing all the combinations of inputs that yield the same level of output.