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Elena L [17]
1 year ago
11

4. Profit maximization and loss minimization

Business
1 answer:
Stella [2.4K]1 year ago
6 0

Jake is incorrect with his assertion that the BYOB should charge 2.25 per can.

<h3>What is Profit maximization and Loss minimization?</h3>

The process of Profit maximization ensures that favorable output and price are achieved to maximize its return while the process of Loss minimization ensures there is lower loss on return in the longer-run.

Price     QD      T*R(P*Q)   Total cost(ATC*Q)    Profit(TR-TC)

2          1000     2000              2750                    -750

2.25      750     1687.5                 2625                   -937.5

Given that loss realized is lower in $2 per unit than $2.25 per unit, then, Jake is not correct with his assertion that the BYOB should charge 2.25 per can.

Note: The point has been placed on the graph to indicate the profit-maximizing price and quantity for BYOB.

Read more about Profit maximization

<em>brainly.com/question/4171648</em>

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Explanation:

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