TTV Corporation's managers estimate that a 50% increase in price would cause an 80% reduction in the quantity of product sold. Total fixed costs for the product are $5,000 and total variable costs are $4,000, based on production of 400 units. The following values may be useful: In (0.2) = -1.609 In (0.5) = -0.693 In (0.8) = -0.223 In (1.5) = 0.405 In (4,000) = 8.294 In (5,000) = 8.517 TTV's profit maximizing price is: $2.44 $3.37 $7.57 $13.36

TTV Corporation's managers estimate that a 50% increase in price would cause an 80% reduction in the quantity of product sold. Total fixed costs for the product are $5,000 and total variable costs are $4,000, based on production of 400 units. The following values may be useful: In (0.2) = -1.609 In (0.5) = -0.693 In (0.8) = -0.223 In (1.5) = 0.405 In (4,000) = 8.294 In (5,000) = 8.517 TTV's profit maximizing price is: $2.44 $3.37 $7.57 $13.36

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 5E

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