Answer:
Asset accounts. A debit increases the balance and a credit decreases the balance. Liability accounts. A debit decreases the balance and a credit increases the balance.
Explanation:
Answer:
$6.00
Explanation:
Given data
quantity demanded ( x ) ∝ 1 / p^3 for p > 1
when p = $10/unit , x = 64
initial cost = $140, cost per unit = $4
<u>Determine the price that will yield a maximum profit </u>
x = k/p^3 ----- ( 1 ). when x = 64 , p = $10 , k = constant
64 = k/10^3
k = 64 * ( 10^3 )
= 64000
back to equation 1
x = 64000 / p^3
∴ p = 40 / ∛x
next calculate the value of revenue generated
Revenue(Rx) = P(price ) * x ( quantity )
= 40 / ∛x * x = 40 x^2/3
next calculate Total cost of product
C(x) = 140 + 4x
Maximum Profit generated = R(x) - C(x) = 0
= 40x^2/3 - 140 + 4x = 0
= 40(2/3) x^(2/3 -1) - 0 - 4 = 0
∴ ∛x = 20/3 ∴ x = (20/3 ) ^3 = 296
profit is maximum at x(quantity demanded ) = 296 units
hence the price that will yield a maximum profit
P = 40 / ∛x
= ( 40 / (20/3) ) = $6
The answer is B.
Hope this helps!
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The producer will decrease the quantity of bicycle production. In the basic Laws of supply and demand, when price decreases there is an increase of supply. Therefore the decrease of price suggest that there is an increase of supply in the market. Also as the price decreases profitability also decreases.