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jenyasd209 [6]
3 years ago
6

Half of all potential customers would pay $10 for your product but half would only pay $8 but you cannot tell them apart. Your m

arginal costs are $4. If you set the price at $8, the expected profit is:a)$3 b)$4 c)$5 d)$6
Business
1 answer:
IgorLugansk [536]3 years ago
5 0

Answer:

The correct answer is b) $4.

Explanation:

This is simple problem, it requires us to to tell expected profit. We know that profit is equal to revenue minus expense. So in question revenue is given as $ 8 and cost is $ 4. So the profit would be

Profit = Revenue -Cost = 8 - 4 = $ 4

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Answer:

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Cost of Sale: Now the raw material costs plus depreciation of production machinery plus direct labour plus variable Overhead cost plus if their is any commission paid for sale of finished goods will be the cost of sale for manufacturing  company. Whereas in the case of Merchandising company, the cost of sale will be only the cost of goods they sold in the year. The depreciation charge will be minor in merchandising company as they don't have any production machineries.

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