Illustrate what is the maximum profit

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Reference no: EM1355823

Suppose that Neptune Music has the copyright to the latest CD of the Heavy Iron band. The market demand curve for the CD is Q = 800 - 100p, where Q represents quantity demanded in thousands and p represents the price in dollars. Production requires a fixed cost of $100,000 and a constant marginal cost of $2 per unit.

a. What price will maximize profits?

b. At that price, how will be the sales?

c. Illustrate what is the maximum profit?

d. Suppose that the fixed cost rises to $200,000. How would this affect the profit-maximizing price?

Reference no: EM1355823

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