Based on market research, a film production company in ectenia obtains the following information about the demand and production costs of its new dvd:

P = 1,000 - 10Q, Total Revenue: $TR = 1,000Q − 10^2$, Marginal Revenue: MR = 1,000 − 20Q, Marginal Cost: MC = 100 + 10Q where Q indicates the number of copies sold and P is the price in Ectenian dollars.

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What is Demand:

Demand is the quantity of consumers who are willing and able to buy products at various prices during a given period of time. Demand for any commodity implies the consumers' desire to acquire the good, the willingness and ability to pay for it.

The demand for a good that the consumer chooses, depends on the price of it, the prices of other goods, the consumer’s income and her tastes and preferences. Whenever one or more of these variables change, the quantity of the good chosen by the consumer is likely to change as well. If the prices of other goods, the consumer’s income and her tastes and preferences remain unchanged, the amount of a good that the consumer optimally chooses, becomes entirely dependent on its price. The relation between the consumer’s optimal choice of the quantity of a good and its price is called the demand function.

What is Production cost:

Production costs refer to all the costs incurred by a business from manufacturing a product or providing a service. Production costs can include a variety of expenses, such as labor, raw materials, consumable manufacturing supplies, and general overhead.

Production costs, which are also known as product costs, are incurred by a business from manufacturing a product or providing a service. These costs include a variety of expenses. For example, manufacturers have production costs related to the raw materials and labor needed to create the product. Service industries incur production costs related to the labor required to implement the service and any costs of materials involved in delivering the service.

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