Your friend Claire has been designing her own hoodies and giving them as gifts to friends and family. She has decided to sell them online soon by using a 3rd party website with a service surcharge based on her pricing. Using the information below, please choose the graph that shows the relationship between CLaire's selling price per hoodie and profit margin?                                                                                      Costs ($) Base Hoodie Cost  $30 Craft Supplies to Design  $10 Selling Website Service Charge 5%

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter20: The Problem Of Adverse Selection Moral Hazard
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Your friend Claire has been designing her own hoodies and giving them as gifts to friends and family. She has decided to sell them online soon by using a 3rd party website with a service surcharge based on her pricing. Using the information below, please choose the graph that shows the relationship between CLaire's selling price per hoodie and profit margin?

                                                                                     Costs ($)
Base Hoodie Cost  $30
Craft Supplies to Design  $10
Selling Website Service Charge 5%
U
с
D
Profit Margin
Profit Margin
0.9-
0.8-
0.7
0.6-
0.5
0.4
0.3-
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
50
50
100
100
150 200 250 300
Selling Price per Hoodie
250
200
Selling Price per Hoodie
150
300
350
350
400
Transcribed Image Text:U с D Profit Margin Profit Margin 0.9- 0.8- 0.7 0.6- 0.5 0.4 0.3- 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 50 50 100 100 150 200 250 300 Selling Price per Hoodie 250 200 Selling Price per Hoodie 150 300 350 350 400
A
B
Profit Margin
Profit Margin
0.8
0.6
0.4
0.2
0.0
0.4
0.2
0.0
-0.2
-0.4
T
T
50
50
100
100
150
200
Selling Price per Hoodie
250 300
150
200
250
Selling Price per Hoodie
300
350
350
400
Q
Transcribed Image Text:A B Profit Margin Profit Margin 0.8 0.6 0.4 0.2 0.0 0.4 0.2 0.0 -0.2 -0.4 T T 50 50 100 100 150 200 Selling Price per Hoodie 250 300 150 200 250 Selling Price per Hoodie 300 350 350 400 Q
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