Question 1: AL Rash insurance offers mail-order automobile insurance to preferred-risk drivers in Dubai. The company is the low-cost provider of insurance in this market but does not believe its $750 annual premium can be raised for competitive reasons. Its rates are expected to remain stable during coming periods; hence, P = MR = $750. Total and marginal cost relations for the company are as follows: TC = $2,500,000 + $500Q + $0.005Q2 MC = $500 + $0.01Q a) Calculate the profit-maximizing activity level. b) Calculate the companys optimal profit.