Slick Shades has a constant marginal cost of production equal to $80 and the distributors have a constant marginal cost of distribution equal to $30. If Slick Shades is producing the profit-maximizing number of sunglasses (in hundreds) and charging the profit-maximizing wholesale price, what is Slick Shades' profit (in hundreds)?
The figure above shows the wholesale demand and marginal revenue curves for Slick Shades Sunglasses, a sunglasses firm with market power. Slick Shades Sunglasses has a constant marginal cost of production and it sells to perfectly competitive independent retail distributors that have a constant marginal cost of distribution.
A) $3,600
B) $2,400
C) $6,400
D) $4,800
A) $3,600
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