Relationship between cost and production quantity

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Reference no: EM131807874

Mr. Sam Spade, the president of Ajax, recently read in a report that a competitor named Bendix has the following relationship between cost and production quantity:

C = $3,000,000 - $18,000Q + $75Q²

where C = total manufacturing cost per year and Q = number of units produced per year. A newly hired employee, who previously worked for Bendix, tells Mr. Spade that Bendix is now producing 110 units per year. If the selling price remains unchanged, Sam wonders if Bendix is likely to increase the number of units produced per year in the near future. He asks you to look at the information and tell him what you are able to deduce from it.

Reference no: EM131807874

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