As the purchase cost is the variable cost that is the variable cost of the goods is expressed as the purchase units price x annual demand quantity and is P into D. And the holding cost is the average quantity in stocks and is q/2 and is given as H x Q / 2. Thus Q is an independent and is a function of the K, D, h
<span>In the table above the output level where the price minus atc (average total cost) is a maximum (or least negative) is the maximum profit position. this occurs at an output of four units.</span>
