A demand of 230 banquet attendees can be expected at a dinner plate price of $80.00 each. A demand of 370 banquet attendees can be expected at a dinner plate price of $45.00 each.Catering Service A has a fixed cost of $1,800 and a marginal cost of $30 for each plate.Catering Service B has a fixed cost of $2,500 and a marginal cost of $22 for each plate.Costs for both caterers include the food, drinks, plates, utensils, tablecloths, glasses, crew, and cleanup.Dinner plates will only be sold as an entire unit. To justify company resources and to ensure the event will benefit the charity, the CEO insists the tickets be sold for no less than $40. All profits will go toward a charity of the committee's choosing.Additional spontaneous donation to the charity will be accepted the night of the banquet. Studies estimate that 5% will give $5, 23% will give $20, 18% will give $50, 7% will give $100, and 2% will give $500.If it is projected that there will be 100 tickets sold at a dinner price of $115.50, which catering service should the committee recommend in order to earn the most profit for the charity?If the projected sales are 100 banquet tickets at a unit price of $115.50, your company should choose Catering Service ______ in order to maximize the banquet’s profit since the profit using Catering Service A is $_____________ and the profit using Catering Service B is $____________.Decide which catering service your company should choose if the projections yield 200 attendees. Include the ticket price at this demand.If the projected sales are 200 banquet tickets at a unit price of $__________, your company should choose Catering Service ______ in order to maximize the banquet’s profit since the profit using Catering Service A is $____________ and the profit using Catering Service B is $____________.

The objective of any private organization is to maximize its profit. Here, the company decides which…

Answered: If it is projected that there will be…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A demand of 230 banquet attendees can be expected at a dinner plate price of $80.00 each. A demand of 370 banquet attendees can be expected at a dinner plate price of $45.00 each.
Catering Service A has a fixed cost of $1,800 and a marginal cost of $30 for each plate.
Catering Service B has a fixed cost of $2,500 and a marginal cost of $22 for each plate.
Costs for both caterers include the food, drinks, plates, utensils, tablecloths, glasses, crew, and cleanup.
Dinner plates will only be sold as an entire unit. To justify company resources and to ensure the event will benefit the charity, the CEO insists the tickets be sold for no less than $40. All profits will go toward a charity of the committee's choosing.
Additional spontaneous donation to the charity will be accepted the night of the banquet. Studies estimate that 5% will give $5, 23% will give $20, 18% will give $50, 7% will give $100, and 2% will give $500.

If it is projected that there will be 100 tickets sold at a dinner price of $115.50, which catering service should the committee recommend in order to earn the most profit for the charity?

If the projected sales are 100 banquet tickets at a unit price of $115.50, your company should choose Catering Service ______ in order to maximize the banquet’s profit since the profit using Catering Service A is $_____________ and the profit using Catering Service B is $____________.

Decide which catering service your company should choose if the projections yield 200 attendees. Include the ticket price at this demand.

If the projected sales are 200 banquet tickets at a unit price of $__________, your company should choose Catering Service ______ in order to maximize the banquet’s profit since the profit using Catering Service A is $____________ and the profit using Catering Service B is $____________.

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