Homework Help is Here – Start Your Trial Now!
Business
Economics
If Connecting U wants to MAXIMIZE its profits, what should they do? a) Connecting U should maintain their price at $16. Dropping the price would decrease their total revenue and profits. b)Connecting U should drop their price to $14.48. By dropping the price, they would increase their total revenue and profits.

If Connecting U wants to MAXIMIZE its profits, what should they do? a) Connecting U should maintain their price at $16. Dropping the price would decrease their total revenue and profits. b)Connecting U should drop their price to $14.48. By dropping the price, they would increase their total revenue and profits.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
100%

If Connecting U wants to MAXIMIZE its profits, what should they do?

a) Connecting U should maintain their price at $16. Dropping the price would decrease their total revenue and profits.

b)Connecting U should drop their price to $14.48. By dropping the price, they would increase their total revenue and profits.

is the answer b?

 

Note- look at the info on the right-hand side of the pic 

Executive Materials Midpoint Formula Connecting U Data If we drop our price by 10 percent to $14.48 (according to the midpoint formula), our 10,000 customers will purchase 4 gigabytes of data (a 33.34 percent increase). Connecting U Data Connecting U Executive Oh, and our total monthly cost is $300,000. Dropping our price and offering more gigabytes of data will have no impact on our costs, as the marginal cost of providing another gigabyte of data is zero. Quantity of Gigabytes per Price per Gigabyte Customer (per month) Connecting U $16.00 3 Executive $14.48 4 Here is a summary of our data... Connecting U Executive Joe, if Connecting U wants to maximize its profits (the equivalent of maximizing revenue in this case), what should they do? • We have 10,000 customers who have the same demand for gigabytes of data as Jamming Joe. • Our total monthly cost is $300,000. Curious Cally • Dropping our price and offering more gigabytes of data will have no impact on our costs, as the marginal cost of providing another gigabyte of data is zero. Connecting U should maintain their price at $16. Dropping the price would decrease their total revenue and profits. Connecting U should drop the price to $14.48. By dropping the price, they will increase their total revenue and profits.
Transcribed Image Text:Executive Materials Midpoint Formula Connecting U Data If we drop our price by 10 percent to $14.48 (according to the midpoint formula), our 10,000 customers will purchase 4 gigabytes of data (a 33.34 percent increase). Connecting U Data Connecting U Executive Oh, and our total monthly cost is $300,000. Dropping our price and offering more gigabytes of data will have no impact on our costs, as the marginal cost of providing another gigabyte of data is zero. Quantity of Gigabytes per Price per Gigabyte Customer (per month) Connecting U $16.00 3 Executive $14.48 4 Here is a summary of our data... Connecting U Executive Joe, if Connecting U wants to maximize its profits (the equivalent of maximizing revenue in this case), what should they do? • We have 10,000 customers who have the same demand for gigabytes of data as Jamming Joe. • Our total monthly cost is $300,000. Curious Cally • Dropping our price and offering more gigabytes of data will have no impact on our costs, as the marginal cost of providing another gigabyte of data is zero. Connecting U should maintain their price at $16. Dropping the price would decrease their total revenue and profits. Connecting U should drop the price to $14.48. By dropping the price, they will increase their total revenue and profits.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Profits
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS