Determining the profit contribution

Reference no: EM13967192

Profit Contribution

Angelica Pickles is manager of a Quick Copy franchise in White Plains, New York. Pickles projects that by reducing copy charges from 5¢ to 4¢ each, Quick Copy's $600-per-week profit contribution will increase by one-third.

A. If average variable costs are 2¢ per copy, calculate Quick Copy's projected increase in volume.

B. What is Pickles' estimate of the arc price elasticity of demand for copies?

Reference no: EM13967192

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