40285
AssignmentLong Text

Profit

Question 40285 • 2102320-Economics HONORS - Edgenuity Teacher

Write three to five sentences explaining which levels of production provide Alonzo’s Cycling with the maximum profit.

Answer

Answer:

The maximum profit is $90, which occurs when Alonzo’s Cycling produces either 5 or 6 bikes per day. At 5 bikes, the company earns $250 in revenue and has costs of $160. At 6 bikes, it earns $300 in revenue and has costs of $210. Producing 7 bikes lowers the profit to $80, so producing 5 or 6 bikes is best.

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