Question

John sells necklaces on the beach. He sold the necklaces for $10 each and his sales averaged 20 per day. When he increased the price by $1, he found that the average decreased by two sales per day. Assume the price is a linear function of the demand. If the material for each necklace costs John $6, what should the selling price be to maximize his profit?

Answer #1

Zack has studied the kayak market in
his area and has examined his sales history. He believes an
additional kayak could be sold in the community for each reduction
in price of $10. He also believes that at $1,800 the last customer
in town would do without a kayak.
How would you represent algebraically the demand function for
kayaks in the town?
If he estimates that the industry supply function for kayaks in
the town is P = 700 +...

At Otto’s egg farm, Otto has found that when he charges $0.05
per egg he sells so many eggs that he cannot keep up with demand
and has zero profit. When he charges $0.17 per egg he sells so few
eggs that he has to throw some out and is also left with zero
profit. Currently he charges $0.15 per egg and has a profit of $124
per day. Let P left parenthesis c right parenthesis be his profit
in...

When a sales manager charged a price of $10, approximately 4,000
units were sold, however, when the price increased by 10% the
demand decreased by 1,000 units. The Manager wants to know the
following (based on operating cost of $7 per unit:
What is the MR? (b) What price would maximize profit? (c) What
impact would a price decrease have on revenue?

Until recently, hamburgers at the city sports arena cost $3.20
each. The food concessionaire sold an average of 18,000 hamburgers
on game night. When the price was raised to $3.80, hamburger sales
dropped off to an average of 12,000 per night.
(a) Assuming a linear demand curve, find the price of a
hamburger that will maximize the nightly hamburger revenue.
(b) If the concessionaire had fixed costs of 2,000 per night
and the variable cost is $0.40 per hamburger, find...

USE EXCEL AND SOLVER TO ANSWER THE QUESTION
Andy Mendoza makes handcrafted dolls, which he sells at craft
fairs. He is considering mass-producing the dolls to sell in
stores. He estimates that the initial investment for plant and
equipment will be $25,000, while labor, materials, packaging, and
shipping will be about $10 per doll. He has determined that sales
volume is related to price, according to the following linear
equation:
v=4,000−80 pv=4,000−80 p
Develop the nonlinear profit function for Andy,...

John, a small businessman, needs your advice on changing the
price of soft drinks he sells in his store. His objective is to
maximize his profits. If the price elasticity of demand for soft
drinks is -2.4, would you recommend a price increase or price
decrease.
Jennifer enjoys bowling and miniature golf. The extent of her
enjoyment is revealed by the following utility schedule:
Number of games
Of Bowling
Total utility
From games played
Number of games
miniature Golf
Total...

32. Alton Benes paints graduation pictures and then sells them
in expensive frames. His average selling price is $299
per painting. Variable costs to deliver a painting are
$29 each and Alton’s fixed costs are $2,000 per month. Alton
currently sells 30 paintings per month and he cannot increase the
number of paintings sold per month, due to a lack of available
time. If Alton wants to generate a profit of $10,000
per month, what would his average selling price...

The weekly demand function for x units of a product
sold by only one firm is
p = 300 −
1
2
x dollars,
and the average cost of production and sale is
C = 200 + 2x dollars.
(a) Find the quantity that will maximize profit.
units
(b) Find the selling price at this optimal quantity.
$ per unit
(c) What is the maximum profit?

When a wholesaler sold a product at $30 per unit, sales were 390
units per week. After a
price increase of $5, however, the average number of units sold
dropped to 365 per week. Assuming
that the demand function is linear, what price per unit will yield
a maximum total revenue?

Van lives in Chicago and runs a business that sells pianos. In
an average year, he receives $709,000 from selling pianos. Of this
sales revenue, he must pay the manufacturer a wholesale cost of
$409,000; he also pays wages and utility bills totaling $281,000.
He owns his showroom; if he chooses to rent it out, he will receive
$1,000 in rent per year. Assume that the value of this showroom
does not depreciate over the year. Also, if Van does...

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