Solution:
(a) Total contribution margin = Sales - Total variable cost
= 1,320,000-111,000
= $1,209,000
Contribution Rate = Contribution margin / Sales
= 1,209,000/1,320,000
= 91.59090909%
(b) Break even sales = Fixed costs / Contribution rate
= 567,000/91.59090909%
= $619,057
(c) Break even volume in units = Break even / Selling price per unit
= 619,057/125
= 4,953 ( Rounded to near whole number)
Answer: Greater the MPC
Explanation:
The Marginal Propensity to consume refers to how much Economic consumption increases or decreases due to a change in income.
The formula for MPC is;
= Change in Consumption/Change in Income.
Consumption is a major component of GDP so it has a direct influence on Economic output. In other words, the larger the level of consumption, the higher the higher the output.
As evident from the equation, if the change in consumption is higher than the change in income, the MPC will be larger. A larger MPC therefore corresponds to a higher Consumption.
If a higher Consumption leads to a larger output and a larger MPC corresponds to a higher Consumption then that means that a higher MPC leads to a larger output.
The majority of private sector employment in the u.s. economy is in the services.
The private sector is the part of the economy, generally pertain to as the citizen sector. Which is ruled by private individuals or groups, usually as a means of firm for profit and it is not regulated by the State.
These are both responsibilities that need to be fullfilled in order to keep a business running.
Answer:
Apples and Banana
a) Profit maximizing prices:
i) For Apple = $100
ii) For Banana = $40
b) Profits equal revenue minus costs:
i) For Apple = $100Q - (20 + 10Q) = $60Q
ii) For Banana = $40 - (26.5 + 5Q) = $8.50Q
c) To maximize profit, the price to charge is $100 for Apples and $40 for Banana.
d) I would expect to earn a profit of $68.50 for a set of apple and banana.
Explanation:
To maximize profit, Apple and Banana will be sold separately.
But, selling them together, the best profit maximizing prices will be $100 for Apples and $10 for Banana.
At this combined price, the banana still makes a contribution of $5 per unit towards offsetting the fixed cost of $26.50
