Question
Farahs Fashions (FF) produces stylish garments. The estimated cost to produce each garment is ($12 + ($64/x)) per garment, where x is the number of
Farahs Fashions (FF) produces stylish garments. The estimated cost to produce each garment is ($12 + ($64/x)) per garment, where x is the number of garments produced/sold. FF can currently sell 30 garments for $24 each. What is the current profit per garment and total profit for FF? A new customer has offered to buy an additional 20 garments, but wants a discount of $5 per garment, should you sell the 20 garments to the new customer? Assuming your old customers find out and also demand the discount, should you still sell the 20 garments to the new customer? What is FFs total profit if they take the new customer?
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