Cliffs Cams (CC) makes cams (surprise!). The average production cost per cam is estimated at...
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Cliffs Cams (CC) makes cams (surprise!). The average production cost per cam is estimated at $40 + 15/2x (where x is the number of cams produced and sold). CC can currently sell 20 cams at $80 each. What is the current profit of the firm? What is the marginal cost of producing one more cam? If a new buyer offers to buy an additional 10 cams at $60 each, then what is the new firm profit? What if our current customers then demand the same discount, what is firm profit?
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