Question: The editor of Spunk magazine is considering three alternative pr

The editor of Spunk magazine is considering three alternative prices for her new monthly periodical. Her estimate of price and quantity demanded are:
Price Quantity Demanded
$7.95 ......... 25,000
$6.95 ......... 31,000
$5.95 ......... 37,000
Monthly costs of producing and delivering the magazine include $90,000 of fixed costs and variable costs of $2.00 per issue.

Required
Which price will yield the largest monthly profit?


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  • CreatedSeptember 23, 2013
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