Determine the average-cost minimizing output

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Reference no: EM13180185

Hook, Inc., is an international manufacturer of bulk antibiotics for the animal feed market. Dr. Mike Jones, head of marketing and research, seeks your advice on an appropriate pricing strategy for Pharmed Caplets, an antibiotic for sale to the veterinarian and feedlot-operator market. This product has been successfully launched during the past few months in a number of test markets, and reliable data are now available for the first time. The marketing and accounting departments have provided you with the following monthly total revenue and total cost information:

TR = $900Q - $0.1Q2 TC = $36,000 + $200Q + $0.4Q2

MR = $900 - $0.2Q MC = $200 + $0.8Q

A. Determine the profits-maximizing output, price and level of profit.

B. Determine the average-cost minimizing output, price and level of profit.

Reference no: EM13180185

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