1. Joel is a car dealer and tries to increase the revenue for December 2021. His market...
Question:
1. Joel is a car dealer and tries to increase the revenue for December 2021. His market research shows that during 2019-2020, the average price of the same car was 50,000, and 500 cars were sold; during 2020-2021,the average car price in was 40,000, and 600 cars were sold. Is the car market demand elastic? Should Joel drop the price to have more consumers to increase the total revenue?
2. A company produces products with fixed costs of $200,000 and variable costs of $6 per unit. If the company price the unit for $10, how many units must it produce and sell to break even?
3. A manufacturer has fixed costs of $150,000, a variable cost of $20 per unit of output, and break-even volume of 60,000 units. What should the manufacturer's unit price be in order to have 40,000 target profit ?