Question
Suppose you own a sandwich shop with fixed costs of $1,000/month and marginal costs of $2.50/sandwich. If the price is $6/sandwich, 500 sandwiches would
Suppose you own a sandwich shop with fixed costs of $1,000/month and marginal costs of $2.50/sandwich. If the price is $6/sandwich, 500 sandwiches would be sold. If the price is $5/sandwich, 760 sandwiches would be sold. Calculate the monthly profits and profit margins (profit/revenue) associated with the price of $6/sandwich and $5/sandwich. Given these calculations, what price should you charge for sandwiches? Explain.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
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