which is the correct answer ???? Elaine makes delicious cupcakes that she mails
ID: 1256544 • Letter: W
Question
which is the correct answer ????
Elaine makes delicious cupcakes that she mails to customers across the country. Her cupcakes are so delicious that she has a great degree of pricing power. Her customers have identical demands for cupcakes. A representative customer's demand is shown in the diagram below. Elaine can make a cupcake for a constant marginal and average total cost of $0.50.
Suppose that Elaine decides to offer a quantity discount according to the following terms: the first 10 cupcakes can be bought for $1.50 each; any cupcake over 10 will be offered at a discount price. How many cupcakes will each customer order at the discounted price? How much do Elaine's profits increase?
which is the correct answer ????
5 additional cupcakes; profit increases by $2.50 5 additional cupcakes; profit increases by $5.00 5 additional cupcakes; profit increases by $1.25 10 additional cupcakes; profit increases by $5.00Explanation / Answer
5 Cupcakes will each customer order at $1.75 discounted price .and will get profit of $ 1.25 .
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