Question

2. King James Factory provides farms and restaurants across the nation with com

syrup. The figure below shows the profit function for the King James Factory with the
relative maximum labeled.
12006
(175, 10312,5)
Profit (Thousands of Dollars)
100
200
3001
400d
Quantity Sold (Thousands of Barrels)
Part A: How many barrels of corn syrup do you recommend that King James Factory
produce, assuming that they will sell everything that is produced? Why?
Part B: When will King James Factory lose money? Justify your answer.
Part C: When will King James Factory break even, that is, make no profit? Justify your
answer.​

Answer 1

Explanation:

A) To maximize profit, they should sell 175 thousand barrels, since that's the highest point on the curve.

B) They will lose money when the curve is below the x-axis, which is approximately less than 25 thousand barrels and more than 325 thousand barrels.

C) They will break even when the curve intersects the x-axis, which is approximately 25 thousand barrels and 325 thousand barrels.