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Question: Acme furniture retails a chair for $250. They believe that they could raise the price of the chair by 10% and sell 30 fewer chairs per year. They have been selling 500 of these chairs per year at the current price. The wholesale cost of the chair is $170.00. They estimate that the variable cost of a transaction (delivery, reorder, paperwork, etc.) is $15.00. Assuming that demand is linear, what is the profit maximizing price for this chair?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93127123

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