Question

You've decided to sell sweatshirts for the upcoming game. You project that at a price of $30.06 per sweatshirt, you will be able to sell 140 shirts. In order to sell 210 sweatshirts, you would need to lower the price to $25.09 per sweatshirt. In order to produce the sweatshirts, it costs you $2.45 per sweatshirt on top of fixed costs of $390. What price should you charge in order to earn a profit of $1200? Assume linear demand. You should charge a price of $ per sweatshirt in order to earn a profit of $1200. If there is more than one correct answer, separate them by a comma. If necessary, round to two decimal places. Do not include units.

Answer 1

og , 210 salm. Given price-quantity pair t = P, ,q,= $30.06, 140 • Price - quantity pair 2 = P2 , L2= 8 • Variable cost per sweatshirt = $ 2.45 fixed cost = $390 a profit = $ 1200 Assuming linea demand, Leat the demand function where x is be y=matb price and y is quantity demand. we find the slope on and intercept b using the given price -quantity pair. 9.-9 210 – 140 25.09-30.06 my ez-pl Im = -14.084 5 ui y = - 14.08 x + b 140 3 -14.08 (30.06) + b & b Therefore 563-2448 demand function is the y = -14.08 x + 563.2448

the product of the quantity so the revenue demanded and will be the price R = you R = (-14.08x +563.2448) * R = –14.08 x? + 563 -24484 The cost of produce 4 units of sweatshirt is TC = 390+ 2.45y TC = 390 + 2.45 (-14.08.24+563.2448) TC = -34.4961 + 1769.95 profit is the difference between the Revenue The cost & P =R- TC P = -14.ogre? +563.244821 +3404964 - 1769.95 P = -14.08*? + 597074 X – 1769.95 since, profit is given $ 1200 = 0 SO - 14.0832? + 597.742 - 2969.95 29887 + 54750 63809 ; x = 36.70 , 5:79 2 = c 1408 so that, you should charge a price of $ 136.70 , 5075 per sweat- - shirt in order to earn a profit of $1200...