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CIMAPRO19-P02-1 Exam - Topic 7 Question 43 Discussion

LL produces an item, the Z, for which the demand curve is estimated to be:P = 10 - 0.0001Qwhere, P is the unit price in $ and Q is the annual sales volume in units;Marginal revenue (MR) = 10 - 0.0002QThe variable cost of producing the Z is $2 per unit. The annual fixed costs of production are $110,000.What is the profit maximizing output level?
C) 40,000 units
A) 50,000 units
B) 45,000 units
D) 35,000 units

CIMAPRO19-P02-1 Exam - Topic 7 Question 43 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 43
Topic #: 7
[All CIMAPRO19-P02-1 Questions]

LL produces an item, the Z, for which the demand curve is estimated to be:

P = 10 - 0.0001Q

where, P is the unit price in $ and Q is the annual sales volume in units;

Marginal revenue (MR) = 10 - 0.0002Q

The variable cost of producing the Z is $2 per unit. The annual fixed costs of production are $110,000.

What is the profit maximizing output level?

Show Suggested Answer Hide Answer
Suggested Answer: C

by Rory at May 07, 2022, 02:04 PM

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Emmanuel
10 months ago
Variable cost is only $2, that's pretty low!
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Hermila
10 months ago
Wait, are we sure about those fixed costs?
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Valentin
11 months ago
No way, I bet it's 45,000 units.
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Jutta
11 months ago
I think it's 50,000 units!
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Brittney
11 months ago
Profit maximization occurs where MR = MC.
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Zoila
11 months ago
I think the key here is that each new Realtor is required to work with a single experienced Realtor. That suggests a master-detail relationship, where the experienced Realtor is the master and the new Realtor is the detail. So I'm going to go with C as the answer.
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Frank
11 months ago
This is tricky! I keep getting confused between authentication and consolidation queries. I think it's the consolidation query, but I'm not 100% sure.
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Arthur
11 months ago
I'm pretty sure the SCORE statement in LOGISTIC returns both predicted probabilities and logits, but I'll need to double-check the details to be sure.
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Geraldo
11 months ago
This seems straightforward enough. I'll just need to make sure I get the tenant name and user account details correct. I'm feeling pretty confident I can get this done without any issues.
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