Determine the value of q that minimizes unit cost uc

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Theoretically, any given production plant has an optimum output level. Suppose a certain production plant has annual fixed costs Fe = $2,OOO,()(Xl Variable cost VC is functionally related to annual output Q in a manner that can be described by the function VC = S12 + $O,rx15Q.Total annual cost is given by TC = FC + VC x Q, The unit sales price for one production mutt P = $250.

(a) Determine the value of Q that minimizes unit cost UC, where UC = TC/Q: and compute the annual profit earned by the plant at this quantum.

(b) Determine the value of Q that maximizes the annual profit earned by the lantana compute arc annual profit earned by the plant at this quantity.

Reference no: EM131258269

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