You've decided to sell sweatshirts for the upcoming game. You project that at a price of $33.24 per sweatshirt, you will be able to sell 120 shirts. In order to sell 260 sweatshirts, you would need to lower the price to $23.02 per sweatshirt. In order to produce the sweatshirts, it costs you $2.62 per sweatshirt on top of fixed costs of $340. What price gives a marginal profit of $0 per item. Assume linear demand.
You've decided to sell sweatshirts for the upcoming game. You project that at a price of $33.24 per sweatshirt, you will be able to sell 120 shirts. In order to sell 260 sweatshirts, you would need to lower the price to $23.02 per sweatshirt. In order to produce the sweatshirts, it costs you $2.62 per sweatshirt on top of fixed costs of $340. What price gives a marginal profit of $0 per item. Assume linear demand.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter23: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 17CQ
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Question
You've decided to sell sweatshirts for the upcoming game. You project that at a price of
$33.24
per sweatshirt, you will be able to sell
120
shirts. In order to sell
260
sweatshirts, you would need to lower the price to
$23.02
per sweatshirt. In order to produce the sweatshirts, it costs you
$2.62
per sweatshirt on top of fixed costs of
$340.
What price gives a marginal profit of $0 per item.Assume linear demand.
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