The Bright Future of Ajax Cleaning Products

How Will Ajax Cleaning Products Thrive in the Industry?

What is the marginal cost curve for Ajax Cleaning Products?

What is the marginal revenue function for Ajax given their pricing strategy?

What is the profit-maximizing level of output for Ajax?

How can we compute Ajax's total dollar profits?

Answers:

a. The marginal cost curve for Ajax is MC = -5,000 + 200Q.

b. The marginal revenue function for Ajax is $20,000.

c. The profit-maximizing level of output for Ajax is 125 units.

d. Ajax's total dollar profits can be calculated by subtracting the total cost from the total revenue at the profit-maximizing level of output.

Ajax Cleaning Products is looking towards a bright future in the industry, with strategic decisions and calculations paving the way for success. By analyzing the short-run cost curve and implementing the right pricing strategy, Ajax is poised to thrive.

Computing the Marginal Cost Curve:

The marginal cost curve for Ajax is determined by the derivative of the total cost function with respect to quantity. By following the formula, we can calculate that the MC = -5,000 + 200Q, showcasing the costs associated with each unit produced.

Determining the Marginal Revenue Function:

With a pricing strategy aligned with Title King, Ajax's marginal revenue function stands at $20,000. This allows Ajax to understand the revenue generated from each additional unit sold, contributing to their profitability.

Finding the Profit-Maximizing Level of Output:

By equating the marginal cost and marginal revenue functions, Ajax can identify the optimal level of output for maximizing profits. In this case, the profit-maximizing level of output for Ajax is 125 units, setting them on the path to financial success.

Calculating Ajax's Total Dollar Profits:

By subtracting the total cost from the total revenue at the profit-maximizing level of output, Ajax can determine their total dollar profits. This comprehensive calculation considers all costs and revenues, providing a clear picture of Ajax's financial performance.

With a solid understanding of marginal cost, marginal revenue, profit maximization, Ajax Cleaning Products is well-equipped to navigate the industry landscape and achieve sustainable growth. The future looks promising for Ajax as they continue to innovate and excel in the market.