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Concept Introduction:
Variable Cost: Variable cost is a cost that changes when the volume of production changes, in the same direction and in the same proportion.
Fixed Cost: Fixed cost is a cost that remains constant irrespective of changes in the production volume. It is represented as the percentage change in price.
Price Electricity of demand: Price elasticity of demand is a measure of the change in the quantity sold or demanded of a product or service in relation to its price change. It is represented in percentage terms.
Price elasticity of demand = % Change in Quantity Demanded ÷ % Change in price
Profit-maximizing price: It is a process that an entity employees to find out the best output and price level in order to maximize its profit. Profit-maximizing price is the price at which the profit is maximized at a given quantity of output and where the marginal revenue is equal to the marginal cost.
(1)
The selling price at which Maria made more money.
(2)
To compute:
The price elasticity of demand for the ice cream cones.
(3)
To compute:
The profit-maximizing price for ice cream cones.
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