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Determine the Profit-Maximizing Price
If a firm targets a 25 % rate of return on sales, and has unit costs of production of $100, what price should it charge if it uses cost-plus pricing? If the firm has a demand function P = 10000 – 20Q is the cost-plus price the profit-maximizing price? If not, determine the profit-maximizing price, quantity and corresponding profit. Is the target rate of return the profit-maximizing r.o.r.? why or why not? What important economic considerations, does cost-plus pricing ignore?
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Price: The price factor is another important variable to be included in demand analysis. Here one has to consider the prices of the product and also its substitute and complement
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1.A firm producing Golf sticks has a production function given by Q=2v(K L) In the short run, the firm’s amount of capital equipment is fixed at k = 100. The rental rate for k
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