Question
You are a manager at The Flying Minotaura small firm that manufactures Type X and Type Y batteries . The marketing department has provided you
You are a manager at The Flying Minotaura small firm that manufactures Type X and Type Y batteries . The marketing department has provided you with the following information about the per-unit demand for Type X batteries:
Price | Quantity |
$22 | 0 |
$20 | 1 |
$19 | 2 |
$18 | 3 |
$17 | 4 |
$16 | 5 |
$15 | 6 |
$14 | 7 |
If you dedicated all resources to the production of one good, you can produce up to 10 Type X batteries or 20 Type Y batteries. Type X batteries cost $7.50 to produce. Type Y batteries can be sold for $10 and cost $7 to produce. You must produce at least 6 type Y batteries due to current contract agreements. How many Type X batteries should you produce to profit maximize?
Hint: Costs to produce are variable costs
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