Hardwood Cutters offers seasoned, split fireplace logs to consumers in Toledo, Ohio. The company is the low-cost provider of firewood in this market with fixed costs of $10,000 per year, plus variable costs of $25 for each cord of firewood. Annual demand and marginal revenue relations for a company are:
P= $225-$0.125Q
MR=∂TR/∂Q=$225-$0.25Q
A. Calculate the profit-maximizing activity level.
B. Calculate the company's optimal profit and return-on-sales levels.