Question
Cogswell Cogs (CC) produces cogs surprise! The estimated cost to produce cogs is ($4 + $18/(x+2)) per cog, where x is the number of cogs
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Cogswell Cogs (CC) produces cogs surprise! The estimated cost to produce cogs is ($4 + $18/(x+2)) per cog, where x is the number of cogs produced/sold. CC can currently sell 20 cogs for $10 each. What is the current profit per cog and total profit for CC? What is the marginal cost of producing the next cog? A new customer has offered to buy an additional 10 cogs, but wants a discount of $1 per cog, should you sell the 5 cogs to the new customer? Assuming your old customers find out and also demand the discount, should you still sell the 5 cogs to the new customer? What is CCs total profit if they take the new customer
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