Question

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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