Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by Cequals400plus2q squared, where q is the level of output and C is total cost. (The marginal cost of production, MC (q ), is 4q; the fixed cost, FC, is $400). If the price of a watch is $80, how many watches should you produce to maximize profits?

The quantity to maximize profit = 20 units

Explanation:

In a perfectly competitive market , profit is maximized at the quantity where the marginal cost is equal to marginal revenue.

Note that the MC is the change in  total cost as a result of a change in total production unit by a unit

Marginal revenue is the change in total revenue as a result of selling additional unit of product. For a perfectly competitive it is equal to the selling price.

To maximize profit , MR = MC

MC- 4q  MR- 80

4q = 80

q = 80/4 = 20

The quantity to maximize profit = 20 units

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; i believe the correct answer is energy star;