A potential investor in the production of a new type of organic fertilizer estimated the demand function of the product to be AR = 150 - Q
Where:
AR is the average revenue in thousands of shillings.
Q is the output in tonnes.
The investor estimated the variable cost (VC) per unit tonne associated with the production to be.
VC/tonne = Q - 285 in thousands of shillings.
The firm's cost when not producing any output is estimated at Sh. 8,750,000.
Required:
(i). The profit furiction.
(ii). The level of output that maximises profit.
(iii). The breakeven output
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