Essay
Firm K is a leading maker of light-weight, water-proof outerwear. During the winter months, demand for its main line of water-proof coats is given by: P = 800 - 0.2Q, where P denotes price in dollars and Q is quantity of units sold per month. The firm produces coats in a single plant (which it leases by the year). The total monthly cost of producing these coats is estimated to be: C = 150,000 + 400Q. Leasing the plant accounts for almost all of the $150,000 fixed cost. What is the firm's marginal cost? Find the firm's profit-maximizing output and price. If the firm's other outerwear products generate $50,000 in contribution, what is the firm's total monthly profit?
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