Maurice Tutor

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Teaching Since: May 2017
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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 11 Feb 2018 My Price 7.00

Century Insurance

P2.7 Profit Maximization: Equations. 21st Century Insurance offers mail-order automobile insur- ance to preferred-risk drivers in the Los Angeles area. The company is the low-cost provider of insurance in this market but does not believe its $750 annual premium can be raised for com- petitive 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  =  DTC/DQ  =  $500  +  $0.01Q

 

A.   Calculate the profit-maximizing activity level.

B.    Calculate the company’s optimal profit and return-on-sales levels.

Answers

Maurice Tutor
(5)
Status NEW Posted 11 Feb 2018 09:02 PM My Price 7.00

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