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What price should be charged in order to maximize profits?

Bob’s Company sells one product with a variable cost of $5 per unit. The company is unsure what price to charge in order to maximize profits. The price charged will also affect the demand. If fixed costs are $100,000 and the following chart represents the demand at various prices, what price should be charged in order to maximize profits?

Units Sold ; ; ; ; Price

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30,000 ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; $10

40,000 ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; $9

;50,000 ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; $8

;60,000 ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; $7

Question 26 options:

A. $10

B. $9

C, $8

D. $7


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