The Calendar Shop

Each year The Calendar Shop orders calendars for the coming year. Anticipated demand for the coming year is for 2000 calendars. The Shop's fixed costs are $750. Each calendar cost $3 and The Calendar Shop sells each one for $5.00. At the end of July during the next year, The Shop will reduce the calendar price to 60% of the original selling price and will sell all the surplus calendars at this price. Assume the original selling price varies from $4.00 to $7.25 in increments of $0.25. The Calendar Shop can order in increments of 250 calendars up to a maximum of 4000 calendars. Answer the questions below. For each question, start with the original conditions given here.

The Calendar Shop will make a profit of $7,250 at a sale price of _____ and order quantity of _____ :

	A.	$6.00 and 4,000
	B.	$6.50 and 3,250
	C.	$7.00 and 2,000
	D.	$7.25 and 1,00