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Determine the optimal number of bran muffins to sell

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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= 4 - 0.5Q.

Problem 1: If your cost of producing bran muffins is C(Q) = 1.5Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price

Reference no: EM132974015

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