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The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent certain types of cancer. You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. However, as a result of this new report, a typical consumer's inverse demand for your bran muffins is now P = 7 - 1.5Q.
Problem 1: If your cost of producing bran muffins is C(Q) = 1.0Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price.
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