Kal Tech Engineering Inc. manufactures video games for ‘The Play Station’. Variable costs are estimated to be $20
per unit and fixed costs are $10,875. The demand to price relationship for this product is Q = 1,000 - (4 × P) where
P is the unit sales price of the game and Q is the demand in number of units.
a. Find the breakeven quantity (or quantities).
b. What is the company's maximum possible revenue?
c. What profit would the company obtain by maximizing its total revenue?
d. What is the company's maximum possible profit?
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