Answer:
b. $301.10
Explanation:
Current Sales = P = $225,000,000
Growth rate = g = 6%
Number of year = 5 years
Using simple growth formula we will find the Sales value after 5 years.
Future Sales = Current Sale ( 1 + growth rate )^Number of years
A = P ( 1 + g )^n
A = 225,000,000 x ( 1 + 0.06 )^5
A = 225,000,000 x 1.33823
A = 301,101,750 = 301.10175 Million
So, the correct option is b. $301.10.
Answer:
e. does not always lead to high prices.
Explanation:
Profit-maximization pricing means fixing prices so that total revenue is more as compared to total costs. This pricing strategy is used by a monopolist.
It is the short run or long run process by which the price and output level is determined by the firm that can give the maximum profit.
The price per item has been set higher than its total cost of production make to sure that the company makes a profit on each sale. As a result, the company makes a profit on every sale and to reduce risk and uncertainty factors in business operations.
Profit maximization pricing objective <u>does not always lead to high prices</u>.
The condition for a profit maximising point is where MR = MC.
When MR is greater than MC, the firm should increase production to take hold of the extra profit, therefore Mara should increase production.
