
The Poster Bed Company believes that its industry can best be classified as
P = 1760 - 12Q
The cost analysis department has estimated the total cost function for the poster bed as
TC = (1/3)Q3 - 15Q2 + 5Q + 24,000
a. Calculate the level of output that should be produced to maximize short-run profits.
b. What
c. Compute total profits at this price-output level.
d. Compute the point
e. What level of fixed costs is the firm experiencing on its bed production?
f. What is the impact of a $5,000 increase in the level of fixed costs on the price charged, output produced, and profit generated?

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