Pastureland Dairy makes cheese which it sells at local supermarkets
Pastureland Dairy makes cheese, which it sells at local supermarkets. The fixed monthly cost of production is $4,000, and the variable cost per pound of cheese is $0.21. The cheese sells for $0.75 per pound; however, the dairy is considering raising the price to $0.95 per pound. The dairy currently produces and sells 9,000 pounds of cheese per month, but if it raises its price per pound, sales will decrease to 5,700 pounds per month. Should the dairy raise the price?

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help