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Bavarian Crystal Works designs and produces lead crystal wine decanters for export to international markets. The production manager of Bavarian Crystal Works estimates total and marginal production costs to be
TC = 10,000 + 40Q + 0.0025Q2
and
MC = 40 + 0.005Q
where costs are measured in U.S. dollars and Q is the number of wine decanters produced annually. Because Bavarian Crystal Works is only one of many crystal producers in the world market, it can sell as many of the decanters as it wishes for $70 apiece. Total and marginal revenue are
TR = 70Q
MR = 70
where revenues are measured in U.S. dollars and Q is annual decanter production.
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