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A company produces a product at a variable cost of $10. The company is interested in maximizing its contributions and profits.
There are 5 potential customers each of who will buy 1 at the most. The maximum price that each customer is willing to pay for the product is given below:
Customer
Willingness to Pay
Jane
$20
Paul
$30
Dave
$40
Bill
$50
Amy
$60
QUESTIONS:
1. At what price should the company sell the product so as to maximize total contribution?
2. How much total contribution will the company make at that price?
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