A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 120 - 0.25P, and the marginal cost of production is $160.
If your cost of producing bran muffins is C(Q) = 4.5Q, determine the optimal number of bran muffins to sell in a single package and the optimal package price.
Instruction: Round your answer for the optimal package price to two decimal places.
a. Determine the optimal number of units to put in a package.
units
b. How much should the firm charge for this package?
$