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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Business

Whitney Schultz

23 October, 04:08

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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Damari Jones · Answer 1

I would say that the price of $20 for the product would be the best because then there is more chance of selling many of them since the price is not too high and the company will make $10 from each one in contribution at a significant volume of sales.