Coke to ourconsumer what should we do if our goal

Assignment Help Macroeconomics

Reference no: EM1336760

Maximizing profit question

Imagine that we are selling bottles of CocaCola in a vending machine. Currently, we charge $1.50 per bottle and have found through trial-and-error that if we raise the price by 1%, the quantity purchased will change by approximately -2% (...in other words, ?=2). If it will cost us approximately $0.75/bottle to supply more Coke to our customers, what should we do if our goal is to maximize profit?

Choose one answer.
a. Raise our price. Even though that means we will sell less soda, we'll get more per bottle, so our profits will rise.
b. Raise our price. We'll sell more soda and generate more profit.
c. Lower our price. Even though that means we will sell less soda, we'll get more per bottle, so our profits will rise.
d. Lower our price. We'll sell more soda and generate more profit.
e. Do nothing.
f. More information is needed to answer this question.

Reference no: EM1336760

Questions Cloud

Forecast the cash flows generated by project : First, Forecast the cash flows generated by project X over its economic life. Second, determine the appropriate opportunity cost of capital(r).

Levered value of firm : Kline Construction is an all-equity firm that has projected perpetual earnings before interest and taxes of $879,000. What is the levered value of the firm?

Assume a direct access file consists of sectors : assume a direct access file consists of sectors with 1024 byte capacity. Suppose also that records are 32 bytes long. On which logical sector do the following logical records lie? What is the relative record number in the sector?

What may cause the loss of one control file : Why must a business have its database in ARCHIVELOG mode?

Coke to ourconsumer what should we do if our goal : If it will cost us approximately $0.75/bottle to supply more Coke to our consumer what should we do if our goal is to maximize profit.

Explain the economic interpretation of the discount factor : CMBA 5621 Financial Management, Individual Problem Set #1: Explain the economic interpretation of the discount factor (1/interest rate factor) calculated from the market price of a risk free investment.

Topology of rapists(power-reassurance) : What is the standard topology of rapists (power-reassurance, power-assertive, anger-retaliatory, opportunistics or anger-excitation (sadist)? References please.

Leverage and capital structure-jasper industrial : Jasper Industrial has no debt outstanding and a total market value of $110,000. Earnings before interest and taxes, EBIT, are projected to be $12,000 if economic conditions are normal.

Leverage and capital structure : Triangle Enterprises has no debt but can borrow at 9 percent. The firm's WACC is currently 14.7 percent and there is no corporate tax.

User Account

All Pages